The following company information is available. The direct materials quantity variance is: Direct materials used for production 36,000 gallonsStandard quantity for units produced 34,400 gallonsStandard cost per gallon of direct material $ 6.00 Actual cost per gallon of direct material $ 6.10 Multiple Choice$10,000 unfavorable.$10,000 favorable.$13,200 unfavorable.$9,600 unfavorable.$13,200 favorable.
Question
The following company information is available. The direct materials quantity variance is: Direct materials used for production 36,000 gallonsStandard quantity for units produced 34,400 gallonsStandard cost per gallon of direct material 6.10 Multiple Choice10,000 favorable.9,600 unfavorable.$13,200 favorable.
Solution
The direct materials quantity variance is calculated as follows:
Step 1: Calculate the difference between the actual quantity of materials used and the standard quantity for the units produced.
In this case, the actual quantity is 36,000 gallons and the standard quantity is 34,400 gallons.
So, the difference is 36,000 - 34,400 = 1,600 gallons.
Step 2: Multiply this difference by the standard cost per gallon of direct material.
The standard cost per gallon is $6.00.
So, the direct materials quantity variance is 1,600 gallons * 9,600.
Because the actual quantity of materials used is greater than the standard quantity, this is an unfavorable variance.
So, the answer is $9,600 unfavorable.
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