Required information Use the following information for the Exercises below. The

Question

Required information Use the following information for the Exercises below. The following information applies to the questions displayed below.] s using 21,000 board feet of wood costing $241,500. rds for one bookshelf are 5 board feet of wood at $11.40 per board foot. xercise 8-13 Computation and interpretation of materials variances LO P2 (1) Compute the direct materials price and quantity variances incurred in manufacturing these bookshelves. AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP Standard Price es Actual Cost Standard Cost AQ AP AQ SP SQ SP 21,000! rect materials price variance rect materials quantity variance

Explanation / Answer

Direct materials price variance = (SP – AP) x AQ

Direct materials quantity variance = SP x (SQ – AQ)

Total direct materials variance = (SP x SQ) – (AP x AQ)

Actual Cost Std Cost AQ x AP AQ x SP SQ x SP      21,000 x          241,500           21,000 x    239,400          22,500 x       256,500 11.50 11.40 11.40 Direct material price variance $         2,100 Adverse Direct material quantity variance $    (17,100) Favorable $    (15,000) Favorable

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