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Direct Materials Variances The following data relate to the direct materials cost for the production of 2,000 automobile tires: Actual: 58,400 lb. at $2.00 Standard: 59,600 lb. at $2.05 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 minus sign and an unfavorable variance as a positive number. Price variance Quantity variance $ Favorable Total direct materials cost variance $ Unfavorable b. The direct materials price variance should normally be reported to the . If lower amounts of direct materials had been used because of production efficiencies, the variance would be reported to the . If the favorable use of raw materials had been caused by the purchase of higher-quality raw materials, the variance should be reported to the Direct Labor Variances The following data relate to labor cost for production of 4,300 cellular telephones: Actual: 2,890 hrs. at $13.00 Standard: 2,840 hrs. at $13.30 a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Rate variance Time variance Total direct labor cost variance b. The employees may have been less-experienced workers who were paid less than more-experienced workers or poorly trained, thereby resulting in a labor rate than planned. The lower level of experience or training may have resulted in efficient performance. Thus, the actual time required was than standard. more less

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