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13 June, 06:18

Summerlin Company budgeted 4,200 pounds of material costing $4.00 per pound to produce 2,300 units. The company actually used 4,700 pounds that cost $4.10 per pound to produce 2,300 units. What is the direct materials quantity variance?

A. $420 unfavorable.

B. $470 unfavorable.

C. $2,000 unfavorable.

D. $2,470 unfavorable.

E. $2,050 unfavorable.

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Answers (1)
  1. 13 June, 09:39
    0
    Option (C) is correct.

    Explanation:

    Given that,

    Standard Quantity = 4,200

    Actual Quantity = 4,700

    Standard Price = $4

    Cost = $4.10 per pound to produce 2,300 units

    Direct Material Quantity variance:

    = (Standard Quantity - Actual Quantity) * Standard Price

    = (4,200 - 4,700) * $4

    = $2,000 Unfavorable

    Therefore, the direct materials quantity variance is $2,000 Unfavorable.
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