Regent Corp. uses a standard cost system to account for the costs of its one pro

Question

Regent Corp. uses a standard cost system to account for the costs of its one product. Materials standards are 3.0 pounds of material at $13 per pound, and labor standards are 3 hours of labor at a standard wage rate of $11. During July Regent Corp. produced 3,260 Payroll totaled $148,680 for 13,350 hours worked. a. Calculate the direct materials price variance. (Do not round your intermediate calculations. Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance).) Price Variance b. Calculate the direet materials quantity variance. (Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e, zero variance)) Quantity Variance

Explanation / Answer

Direct material price variance = (standard price-actual price)actual quantity purchased

                                           = (13*10080-132390)

Direct material price variance = 1350 Unfavourable

Direct material quantity variance = (standard quantity-actual quantity)standard price

                                                = (3260*3-10080)13

Direct material quantity variance = 3900 Unfavourable

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