Question

The following data relate to the direct materials cost for the production of 20,000 automobile tires: Actual: 80,000 lbs. at $2.65 $212,000 Standard: 86,000 lbs. at $2.50 $215,000 a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter favorable variances as negative numbers. Enter unfavorable variances as positive numbers. Price variance $fill in the blank 1 3,000 Unfavorable Variance Quantity variance fill in the blank 3 12,000 Favorable Variance Total direct materials cost variance $fill in the blank 5 15,000 Favorable Variance b. The direct materials price variance should normally be reported to the Purchasing Department . The direct materials quantity variance due to a malfunction of equipment that had not been properly operated should be reported to the production supervisor . The total materials cost variance should be reported to the senior plant management .

Answer 1