Direct Materials Variances Techno Tyme Inc. produces electronic timepieces. The

Question

Direct Materials Variances Techno Tyme Inc. produces electronic timepieces. The company uses mini-LCD displays for its products. Each timepiece uses one display. The company produced 430 timepieces during October. However, due to LCD defects, the company actually used 450 LCD displays during October. Each display has a standard cost of $6.90. Four hundred fifty LCD displays were purchased for October production at a cost of $2,925. Determine the price variance, quantity variance, and total direct materials cost variance for October. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your per unit computations to nearest cent, if required. Price variance $ Quantity variance $ Total direct materials cost variance $

Explanation / Answer

Materiral price variace = ( Std price - Actual price ) Std price

                                        = (6.90 - $6.50)450

                                       = 180(F)

Material qty variacne = (430 - 450 ) 6.90

                                   = 138(U)

Total variance = 180(F) + 138 (U) = 42(F)

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