Five Rings, Inc, has collected the following data on one of its products:
| Direct materials standard (4 lbs.@ $ 1/b.) | $4per finished unit |
| Total direct materials cost variance— unfavorable | $11,350 |
| Actual direct materials used | 172,500 lbs |
| Actual finished units produced | 34,500 units |
| The direct materials quantity variance is: |
| $34,500 favorable. | |
| $11,350 unfavorable. | |
 | $23,150 favorable. |
| → | $34,500 unfavorable. |
| $11,350 favorable. |
| Quantity used = 172,500/34,500 = 5 pounds per units |
| Quantity unit variance = 5 - 4 = 1 pound per unit (unfavorable) |
|
Direct materials quantity variance = (34,500 units x 1 pound x $1 per pound ) = $34,500 unfavorable
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