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The per-unit standards for direct materials are 2 gallons at $4 per gallon. Last month, 12200 gallons of direct materials that actually cost $45140 were used to produce 7000 units of product. The direct materials quantity variance for last month was _______

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Answer:

$7,200 favorable

Explanation:

The computation of the material quantity variance is shown below:

= Standard Price × (Standard Quantity - Actual Quantity)

= $4 per gallon × (2 gallons × 7,000 units - 12,200 gallons)

= $4 per gallon × (14,000 - 12,200 gallons)

= $4 per gallon × 1,800 gallons

= $7,200 favorable

All other information which is given is not relevant. Hence, ignored it

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