Sonne Company produces a perfume called Whim. The direct materials and direct la

Question

Sonne Company produces a perfume called Whim. The direct materials and direct labor standards for one bottle of Whim are given below: During the most recent month, the following activity was recorded: a.Twenty thousand ounces of material were purchased at a cost of $2.40 per ounce. b.The company produced only 2,000 bottles using 16,000 ounces of material. The rest of the material purchased remained in raw materials inventory. c.Nine hundred hours of direct labor time were recorded at a total labor cost of $10,800. Required:Compute the direct materials price and quantity variances for the month. Direct materials price variance Direct materials quantity variance

Explanation / Answer

DM Price variance = Stnd price vs actual price x actual quantity purchased (2,000 Fav)
DM Quantity variance = Stnd qty vs actual qty x stnd price (5,000 Unfav)

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