Question

Myers Corporation has the following data related to direct materials costs for November: actual cost for 4,650 pounds of material at $5.20 and standard cost for 4,420 pounds of material at $6.40 per pound.

Answer 1

Computation of direct material variances:

Direct material cost variance:

=(standard quantity*standard cost - actual quantity*actual cost)

=(4420*$6.4)-(4650*$5.2)

=$28288-$24180

=$4108 favorable

Direct material price variance:

=(Actual quantity*standard price - Actual quantity*actual price)

=(4650*$6.4 - 4650*$5.2)

=$5580 favorable

Direct material quantity variance:

=(standard quantity*standard price-actual quantity*standard price)

=(4420*$6.4-4650*$6.4)

=$1472 unfavorable