Standard direct materials quantity: 4,000 units Actual direct materials quantity: 3,200 units Which of the following correctly describes the quantity variance? The quantity variance will be favorable The quantity variance will be unfavorable This is no quantity variance There is not enough information to answer this question
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
The following amounts are provided from the direct materials budget:
Standard direct materials quantity: 4,000 units
Actual direct materials quantity: 3,200 units
Which of the following correctly describes the quantity variance?
The quantity variance will be favorable
The quantity variance will be unfavorable
This is no quantity variance
There is not enough information to answer this question
Step by step
Solved in 4 steps
