Amos,Inc. uses a standard cost system in which direct material is carried at standard cost. Standards for One unit includes a standard quantity of 8.5 gallons and a standard price $1.85 per Gallon. During March, Amos Purchased 150000 Gallons of direct material at cost of 300000 and used 150500 gallons in production of 18000 units (there was adequated beginning inventory to allow for the extra material that was used).
Calcualate the direct material price and quantity variances and circle whether the variances are Favorable or unfavorable.
DM Price Variance $ F U
DM Quantity Variance $ F U
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