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 1,800 automobile tires: Actual 61,200 lbs. at $1.80 $110,160 Standard 59,400 lbs. at $1.75 $103,950 a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter favorable variances as negative numbers. Enter unfavorable variances as positive numbers Unfavorable Variance Price variance Quantity variance Total direct materials cost variance Unfavorable Variance Unfavorable Variance

Explanation / Answer

Answer a Direct Material price variance = (Actual price - Standard price) * Actual quantity of raw material consumed Direct Material price variance = ($1.80 - $1.75)*61200 lbs = $3060 Unfavorable Variance Direct Material Quantity Variance = (Actual quantity - Standard quantity) * Standard price Direct Material Quantity Variance = (61200 lbs - 59400 lbs) * $1.75 = $3150 Unfavorable Variance Price Variance $3,060.00 Unfavorable Variance Quantity variance $3,150.00 Unfavorable Variance Total Direct Material Cost variance $6,210.00 Unfavorable Variance Answer a Direct Labour rate variance = (Actual rate - Standard rate)* Actual labour hours worked Direct Labour rate variance = ($14 - $13.70)* 4630 hours = $1389 Unfavorable Variance Direct labour time variance = (Actual hours - standard hours) * standard rate Direct labour time variance = (4630 hours - 4700hours) * $13.70 = $959 Favorable Variance Rate Variance $1,389.00 Unfavorable Variance Time variance -$959.00 favorable Variance Total Direct Labour Cost variance $430.00 Unfavorable Variance

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