Direct Materials Variances The following data relate to the direct materials cost for the production of...

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	$

Solutions

Expert Solution

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 )

ekkarill92 answered 1 year ago

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