Thank you Direct Materials Variances Tip Top Corp produces a product that requir

Question

Thank you Direct Materials Variances Tip Top Corp produces a product that requires 16 standard gallons per unit. The standard price is $2.5 per gallon. If 2,800 units required 46,100 gallons, which were purchased at $2.42 per gallon, what is the diredt materials (a) price variance, (b) quantity variance, and (e) cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number a. Diredt materials price variance b. Direct materials quantity variance . Direct materials cost vanance

Explanation / Answer

Direct materials price variance = 46100*(2.42-2.5)= 3688 Favorable Direct materials quantity variance =2.5*(46100-2800*16)= 3250 Unfavorable Direct materials cost variance = (46100*2.42)-(2800*16*2.5)= 438 Favorable

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