Calculate Direct Material Quantity Variance
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Question
Dudley Industries developed the following standard costs for direct materials and direct labor for gadgets:
|
|
Standard quantity |
Standard price |
|
Direct materials |
0.60 pounds |
$25 per pound |
|
Direct labor |
0.20 hours |
$18 per hour |
During October, Dudley produced and sold 8,000 gadgets using 5,000 pounds of direct materials at an average cost per pound of $22.50, and 1,560 direct labor hours at an average wage of $18.20 per hour. What is the direct material quantity variance for October and what are likely causes of this variance?
Summary
The question belongs to Finance and it discusses about calculation of direct material quantity variance and the cause of variance.
Total Word Count 70
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