Georgia, Inc. has collected the following data on one of its products. The direct materials quantity variance is: Direct materials standard (4 lbs. @ $1/lb.) $ 4 per finished unit
Total direct materials cost variance-unfavorable $ 13,750 Actual direct materials used 150,000 lbs.
^Actual^finished^units^produced^30,000units

Question

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/lb = $30,000 unfavorable.