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Georgia, Inc

Accounting

Georgia, Inc. has collected the following data on one of its products. The direct materials quantity variance is:

Direct materials standard (3 lbs @ $1/lb) $3per finished unit

Total direct materials cost variance—unfavorable $17,250

Actual direct materials used 128,000lbs

Actual finished units produced 32,000units

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Computation of the direct materials quantity variance:-

Direct material quantity variance = Standard price * (Actual quantity used - Standard quantity)

= $1 * (128,000 - (32,000*3))

= $1 * (128,000 - 96,000)

= $1 * 32,000

= $32,000 (U)

The direct materials quantity variance is unfavorable because the actual quantity is greater than the standard quantity.

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