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18 September, 05:53

Summerlin Company budgeted 4,000 pounds of material costing $4.00 per pound to produce 2,100 units. The company actually used 4,500 pounds that cost $4.10 per pound to produce 2,100 units. What is the direct materials quantity variance?

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  1. 18 September, 07:00
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    The correct answer is $2,450

    Explanation:

    The units are the same, so we going to work with the cost and the pounds.

    4,000 pounds x cost per pound $4.00 = (4,000*4) = 16,000

    4,500 pounds x cost per pound $4.10 = (4,500*4.1) = 18,450

    18,450 - 16,000 = $2,450

    The direct materials variance is $2,450
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