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Calculate Direct Material Quantity Variance

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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