Direct Materials Variances Using the following standard unit costs and the actua

Question

Direct Materials Variances

Using the following standard unit costs and the actual cost and usage data that follow, compute the direct materials price and direct materials quantity variances.

Direct materials quantity standard 1 pound per unit Direct materials price standard $10.00 per pound Direct labor time standard 0.5 hour per unit Direct labor rate standard $12.00 per hour Variable overhead rate standard $6.00 per machine hour Fixed overhead rate standard $11.00 per machine hour Machine hour standard 4 hours per unit

Explanation / Answer

Direct materials price variance = (10 - 10.10) * 21800 =$2180U Unfavorable Direct materials quantity variance =(21000 - 21800) * 10= $8000U Unfavorable

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