1. The standard costs and actual costs for direct materials for the manufacture

Question

1.The standard costs and actual costs for direct materials for the manufacture of 1,000 actual units of prodcut are as follows:

Standard Costs

Direct Materials (per completed Unit) 1.05 kilograms @$8.00

Direct Materials

Direct Materials 2,000 kilograms@$7

The amount of direct materials price variance is:

2. The following data relate to direct materials costs for May:

Actual costs 4,000 pounds at $5.50

Standard Costs 4,200 pounds at $6.00

a. What is the direct materials price variance?

b. What is the direct materials quantity variance?

Explanation / Answer

1 Direct materials price variance = 2000*(7-8) = 2000 favorable 2 Direct materials price variance = 4000*(5.5-6) = 2000 favorable Direct materials quantity variance = 6*(4000-4200) = 1200 favorable

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