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Dana, Inc. recently completed 56,000 units of a product that was expected to consume 4 pounds of direct material per

finished unit. The standard price of the direct material was $8.50 per pound. If the firm purchased and consumed

228,000 pounds in manufacturing (cost = $1,881,000), the direct-material quantity variance would be (with steps)

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Answer:

$34,000 Units

Step by Step Explanation:

Direct Material Quantity Variance

= SP x (AQ – SQ Allowed)

Therefore:

SQ allowed: $56,000 units x 4 lbs = $224,000 lbs.

Direct Material Quantity Variance: $8.50 x ($228,000 lbs – $224,000 lbs) = $34,000 Units

The direct material quality variance is $34,000 Units

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