Using the same data as above, what is the direct materials total variance (actual cost minus standard cost for actual output)?

Using the same data as above, what is the direct materials total variance (actual cost minus standard cost for actual output)?

• A. $220 F
• B. $500 U
• C. $0
• D. $720 F

Answer: (C)

Direct materials total variance is the difference between what was actually spent on materials and what should have been spent for the actual level of output. It uses the actual cost minus the standard cost allowed for the actual production. If that difference is zero, it means the materials were purchased and used exactly as planned for the actual output. There’s no over- or under-spending on materials for that production run. The total variance is the sum of the price variance and the usage (quantity) variance, so a zero total can occur either because both variances are zero or because a favorable and an unfavorable variance offset to net zero. In this data, the actual cost matches the standard cost for the actual output, yielding a zero direct materials total variance.

Direct materials total variance is the difference between what was actually spent on materials and what should have been spent for the actual level of output. It uses the actual cost minus the standard cost allowed for the actual production.

If that difference is zero, it means the materials were purchased and used exactly as planned for the actual output. There’s no over- or under-spending on materials for that production run. The total variance is the sum of the price variance and the usage (quantity) variance, so a zero total can occur either because both variances are zero or because a favorable and an unfavorable variance offset to net zero. In this data, the actual cost matches the standard cost for the actual output, yielding a zero direct materials total variance.