Direct Materials Variances The following data relate to the direct materials cos

Question

Direct Materials Variances

The following data relate to the direct materials cost for the production of 2,000 automobile tires:
Actual: 43100 lbs at $2.05 $88355
standard: 44,100 lbs at $2.00 $88200

a. Determine the price variance, quantity variance, and total direct materials cost variance. Use the minus sign to enter favorable variances as negative numbers.


Price variance:$

Quantity variance:$

Total direct materials cost variance:$


b. To whom should the variances be reported for analysis and control?

Explanation / Answer

A.

Price Variance --> ($2.05-$2.00) * 43,100 = $2,155 U
Quantity Variance --> (43,100-44,100) * $2.00 = ($2000) F
Direct Materials Cost Variance --> $88,355 - $88,200 = $155 U

B.

Variances should be reported to purchases department

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