Question

Direct Materials Variances

The following data relate to the direct materials cost for the production of 2,500 automobile tires:

Actual:	49,500 lbs. at $1.9 per lb.
Standard:	51,000 lbs. at $1.95 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	$

Answer 1

Answer
Sr.No	Particulars	Formula and Calculation
1	Direct Materials Price Variance	(Standard price - Actual price) * Actual quantity
		= (1.95 - 1.90) * 49500
		= $ - 2475 (F)
2	Direct Materials Quantity Variance	(Standard units - Actual units) * Standard rate
		= (51000 - 49500) * 1.95
		= $ - 2925 (F)
3	Total Direct Materials Cost Variance	(Standard Quantity * Standard Price ) - (Actual Quantity * Actual price )
		= (51000 * 1.95) - (49500 * 1.90)
		= $ - 5400 (F)