PROBLEMI Hawley, Inc. manufacturers Product S for national distribution. The sta

Question

PROBLEMI Hawley, Inc. manufacturers Product S for national distribution. The standard costs manufactures of Product s were as follows: Standard Cost 1,500 pounds at $35 4,800 hours a $11 Rates per labor hour Based on 100% of normal Capacity of 5,500 labor hours: Variable cost, $2.40 Fixed cost, $3.50 Actual Costs Direct Materials Direct labor Factory Overhead 1,600 pounds at $32 4,500 hours at $11.80 $12,300 variable cost $19,250 fixed cost Instructions 1. Determine the quantity variance, price variance, and total direct materials cost variance for Product S.

Explanation / Answer

Direct material quantity variance = (Standard qty-actual qty)Standard price

= (1500-1600)*35

Direct material quantity variance = 3500 Unfavorable

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

= (35-32)*1600

Direct material price variance = 4800 Favorable

Total direct material cost variance = (1500*35)-(1600*32) = 1300 Favorable

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