Accounting SmartBook Practice Test 2026 - Free Accounting Practice Questions and Study Guide

Unlock all questions

This demo includes only 20 questions. Upgrade to access hundreds of questions, flashcards, exam simulations, and disable ads.

Full question bankExam simulationsFlashcards

From $12.50Unlock all

Session length

1 / 20

ABC Company standard: direct materials are 0.5 pounds per unit at $1.00 per pound. The company produced 35,000 units. Actual direct materials used were 18,000 pounds costing $17,280. What is the direct materials quantity variance?

$500 U

Direct materials quantity variance measures the difference between the actual quantity of material used and the standard quantity allowed for the actual output, valued at the standard price.

For 35,000 units, the standard usage is 35,000 × 0.5 lb = 17,500 lb. Actual usage is 18,000 lb, which is 500 lb more than the standard. Valuing at the standard price of $1 per pound gives 500 × $1 = $500. Because more material was used than planned, this variance is unfavorable. So the direct materials quantity variance is $500 U.

(As a side note, the overall cost variance would reflect the difference between actual cost and the standard cost for actual output: 17,280 vs 17,500, which is $220 favorable.)

$500 F

$720 F