TechSolvers produces 8-foot USB cables. During the past year, the company purcha

Question

TechSolvers produces 8-foot USB cables. During the past year, the company purchased 59,374,000 feet of plastic-coated wire at a price of $0.28 per foot. The direct materials standard for the cables allows 8.56 feet of wire at a standard price of $0.26. During the year, the company used a total of 534,690 feet of wire to produce 69,400 8-foot cables.

Calculate TechSolvers’ direct materials quantity variance for the year. (Round answer to 0 decimal places, e.g. 125. If variance is zero, select "Not Applicable" and enter 0 for the amounts.)

Explanation / Answer

Direct materials quantity variance (AQ x SP) – (SQ x SP)

= [534,690 x $0.26] – [8.56 x 69,400 x $0.26]

= $139,019 - $154,457

= $15,438 Favorable

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