The Southside Corporation budgeted 4,400 pounds of direct materials to make 2,600 units of product. The company actually used 4,800 pounds of direct materials to make the 2,600 units. The direct materials quantity variance is $1,500 unfavorable. What is the standard price per pound of direct materials?

Question

Quizplus · Accepted Answer

The direct materials quantity variance is calculated as (Actual Quantity - Standard Quantity) x Standard Price. Here, (4,800 - 4,400) x Standard Price = $1,500. Solving for Standard Price gives $1,500 / 400 = $3.75.

The Southside Corporation Budgeted 4,400 Pounds of Direct Materials to Make