Asked by Isabella Cardenas on Jul 11, 2024

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If the standard to produce a given amount of product is 2,000 units of direct materials at $12 and the actual is 1,600 units at $13, the direct materials quantity variance is $5,200 favorable.

Quantity Variance

The difference between the expected amount of materials or products required for production and the actual amount used, affecting budget or efficiency evaluations.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product.

Favorable

A term used in accounting and finance to describe a condition or result that is better than expected or budgeted.

  • Analyze and interpret the disparities in price and quantity for direct materials and labor, including their precise computation.
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SO
SMITH OMOIRAWUAJul 12, 2024
Final Answer :
False
Explanation :
Direct materials quantity variance = (Standard quantity of materials - Actual quantity of materials) x Standard price per unit

Standard quantity of materials = 2,000 units
Actual quantity of materials = 1,600 units
Standard price per unit = $12

Direct materials quantity variance = (2,000 - 1,600) x $12 = $4,800 unfavorable

Therefore, the statement is false. The direct materials quantity variance is not $5,200 favorable, but rather $4,800 unfavorable.