Question

Dvorak Company produces a product that requires 5 standard pounds per unit. The standard price is $2.50 per pound. If 1,000 units required 4,500 pounds, which were purchased at $3.00 per pound, what is the direct materials (a) price variance, (b) quantity variance, and (c) 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. a. Direct materials price variance $ b. Direct materials quantity variance $ c. Total direct materials cost variance $

Answer 1

a. Direct materials price variance $2,250

b. Direct materials quantity variance - $11,250

c. Total direct materials cost variance - $9,000

Step-by-step explanation:

a. Direct materials price variance

materials price variance =(AP-SP)×AQ

=($3.00-$2.50)× 4,500 pounds

= $2,250

b. Direct materials quantity variance

materials quantity variance = (AQ-SQ)× SP

= (4,500 pounds - 5,000 pounds)×$2.50

= - $11,250

c. Total direct materials cost variance

Total direct materials cost variance=Direct materials price variance+Direct materials quantity variance

= $2,250-$11,250

= - $9,000