Question

Direct Materials Variances

The following data relate to the direct materials cost for the production of 1,900 automobile tires:

Actual:	57,600 lbs. at $1.7 per lb.
Standard:	56,400 lbs. at $1.65 per lb.

a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Direct Materials Price Variance	$
Direct Materials Quantity Variance	$
Total Direct Materials Cost Variance	$

Answer 1

Answer:

Direct Materials Price Variance             = Actual Quantity x ( Standard price (-) Actual price )              =    57,600 x ( $ 1.65 (-) $ 1.70 )              =    $ 2,880 ( Unfavourable )

Direct Materials Price Variance =    $ 2,880 ( Unfavourable )

Direct Materials Quantity Variance               = Standard Price x ( Standard Quantity (-) Actual Quantity)               =   $ 1.65 x ( 56,400 (-) 57,600 )               =    $ 1,980 ( Unfavourable )

Direct Materials Quantity Variance =    $ 1,980 ( Unfavourable )

Total Direct Materials Cost Variance                  = (Standard Quantity x Standard Price ) (-) (Actual Quantity x Actual price )                  = ( 56,400 x $ 11.65 ) (-) ( 57,600 x $ 1.70)                   =   $ 93,060 (-) $ 97,920                  =   $ 4,860 ( Unfavourable )

Total Direct Materials Cost Variance =   $ 4,860 ( Unfavourable )