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Homework answers / question archive / Georgia, Inc
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
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.