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 Hart Company made 4,500 bookshelves using 21,000 board feet of wood costing $241,500. The company's direct materials standards for one bookshelf are 5 board feet of wood at $11.40 per board foot. Exercise 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 Actual Cost Standard Cost

Explanation / Answer

Direct material variance = (AQ - SQ) * SP

= (21000 - 5*4500) * 11.40 = -17100

= 17100 Favourable

Direct price variance = Actual cost - Actual quantity * Standard price

= 241500 - 21000 *11.40 = 2100 Unfavourable

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