The standard costs and actual costs for direct materials, direct labor, and factory overhead for the manufacture of 2,500 units of product are as follows:
Standard Costs
Direct materials 2,500 kilograms @ $8
Direct labor 7,500 hours @ $12
Actual Costs
Direct materials 2,600 kilograms @ $8.75
Direct labor 7,400 hours @ $11.40
Factory overhead (100% capacity Af?cAc‚¬” 10,000 hrs.):
Variable cost @ $2 per hour
Total variable cost, $18,000
Fixed cost @ $0.80 per hour
Total fixed cost, $8,000
The following data relate to direct materials costs for November:
Actual costs 4,500 pounds at $6.00
Standard costs 4,600 pounds at $5.50
What is the direct materials price variance?
a. $2,250 favorable
b. $2,250 unfavorable
c. $2,300 unfavorable
d. $1,700 unfavorable
(Use above question information) What is the direct materials quantity variance?
a. $550 unfavorable
b. $600 favorable
c. $550 favorable
d. $600 unfavorable
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