Dorsey Corporation Company budgeted 600 pounds of direct materials costing $28.00 per pound to make 7,000 units of product. The company actually used 630 pounds of direct materials costing $30.00 per pound to make the 7,000 units. What is the direct materials quantity variance?

Question

Rachael Lawson

Business

19 March, 10:00

Dorsey Corporation Company budgeted 600 pounds of direct materials costing $28.00 per pound to make 7,000 units of product. The company actually used 630 pounds of direct materials costing $30.00 per pound to make the 7,000 units. What is the direct materials quantity variance?

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Simone · Answer 1

Direct material quantity variance = $840 unfavorable

Explanation:

Giving the following information:

Dorsey Corporation Company budgeted 600 pounds of direct materials costing $28.00 per pound to make 7,000 units of product.

The company used 630 pounds of direct materials to make the 7,000 units.

To calculate the direct material quantity variance, we need to use the following formula:

Direct material quantity variance = (standard quantity - actual quantity) * standard price

Direct material quantity variance = (600 - 630) * 28

Direct material quantity variance = $840 unfavorable