Quantity Variance for Direct Material & Direct Labor
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Scenario: Shanghai Toy Company produces 10,000 stuffed bears. The standard direct-material allowance is 1.75 kilograms per bear, at a cost per kilo of $3. Actually, 16,500 kilos if materials (input) were used to produce the 10,000 bears (output). Similarly, the standard allowance for direct labor is 4.6 hours to produce one bear, and the standard hourly cost is $6. But 46,700 hours (input) were used to produce the 10,000 bears.
Question: Compute the quantity variances for direct materials and direct labor.
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Solution Summary
The expert examines quantity variances for direct material and direct labor.
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Material Quantity Variance(MQV)
MQV = (Actual quantity - standard quantity) * Standard price ...
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