Georgia, Inc. has collected the following data on one of its products. The direct materials quantity variance is: $$\begin{array} { l l }
\text { Direct materials standard (4 lbs. @ \$1/16.) } & \$ 4 \text { per finished unit } \
\text { Total direct materials cost variarne - unfavorable } & \$ 13,750 \
\text { Actual direct materials used } & 150,000 \text { lbs } \
\text { Actual finished units produced } & 30,000 \text { units }
\end{array}$$

Question

Georgia, Inc. has collected the following data on one of its products. The direct materials quantity variance is: $$\begin{array} { l l } 
\text { Direct materials standard (4 lbs. @ \$1/16.) } & \$ 4 \text { per finished unit } \
\text { Total direct materials cost variarne - unfavorable } & \$ 13,750 \
\text { Actual direct materials used } & 150,000 \text { lbs } \
\text { Actual finished units produced } & 30,000 \text { units }
\end{array}$$

Quizplus · Accepted Answer

The direct materials quantity variance is calculated as (Actual Quantity - Standard Quantity) x Standard Price. The standard quantity for 30,000 units is 120,000 lbs (30,000 units x 4 lbs/unit). The variance is (150,000 lbs - 120,000 lbs) x $1 = $30,000 unfavorable.

Georgia, Inc A) $30,000 Favorable