Question

Fletcher Company collected the following data regarding production of one of its products. Compute the direct materials quantity variance.

Direct materials standard (6 lbs. @ $2/lb.)	$	12		per finished unit
Actual direct materials used		243,000		lbs.
Actual finished units produced		40,000		units
Actual cost of direct materials used	$	483,570

Multiple Choice

• $2,430 unfavorable.

• $3,570 favorable.

• $3,570 unfavorable.

• $6,000 unfavorable.

• $2,430 favorable.

Answer 1

Option $6,000 unfavorable is correct

direct materials quantity variance = (Standard quantity – Actual quantity)*Standard price

direct materials quantity variance = (240,000-243,000)*$2 = $6,000 unfavorable

Note:

Standard Quantity = ​Actual Finished Units× Standard Quantity per Finished Unit​

                                  = 40,000×6=240,000​