Reference: 21_04
A company has established 5 pounds of Material M at $2 per pound as the standard for the material in its Product A. The company has just produced 1,000 units of this product, using 5,200 pounds of Material M that cost $9,880.
-The direct materials quantity variance is:
A) $400 unfavorable
B) $120 favorable
C) $400 favorable
D) $520 favorable
E) $520 unfavorable

Question

Quizplus · Accepted Answer

($2 x 5,200 pounds) - [$2 (1,000 units x 5 pounds)] = $400 unfavorable

Reference: 21_04 a Company Has Established 5 Pounds of Material M at M