A company uses the following standard costs to produce a single unit of output.
During the latest month,the company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output.Direct labor costs for the month totaled $56,350 based on 4,900 direct labor hours worked.Variable manufacturing overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was $10,400.
-Based on this information,the direct materials quantity variance for the month was:
A)$1,800 favorable
B)$5,800 unfavorable
C)$5,800 favorable
D)$1,800 unfavorable
E)$1,000 favorable

Question

A company uses the following standard costs to produce a single unit of output. 
During the latest month,the company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output.Direct labor costs for the month totaled $56,350 based on 4,900 direct labor hours worked.Variable manufacturing overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was $10,400.
-Based on this information,the direct materials quantity variance for the month was:
A)$1,800 favorable 
B)$5,800 unfavorable 
C)$5,800 favorable 
D)$1,800 unfavorable 
E)$1,000 favorable

Quizplus · Accepted Answer

The direct materials quantity variance is calculated as the difference between the actual quantity used and the standard quantity allowed, multiplied by the standard price. A favorable variance occurs when the actual quantity used is less than the standard quantity allowed, resulting in a cost saving.

A Company Uses the Following Standard Costs to Produce a Single