Answer:
Direct Material Price Variance = $1,100 Favorable
Direct Material Quantity Variance = - $9,075 Unfavorable
Explanation:
Direct Material Price Variance = (Standard Price - Actual Price) X Actual Quantity
Provided Standard Price = $2.50
Actual Price = $2.40
Actual Quantity = 11,000 pounds
Direct Material Price Variance = ($2.5 - $2.4) X 11,000 pounds
= $1,100 Favorable
This is favorable because actual price is less than Standard Price.
Direct Material Quantity Variance = (Standard Quantity - Actual Quantity) X Standard Price
Standard Quantity for Actual Output = 1,100 X 5.70 pounds per unit = 6,270 pounds
Actual Quantity used = 9,900 pounds
Standard Price = $2.50
Direct Material Quantity Variance = (6,270 - 9,900) X $2.5
= - $9,075 Unfavorable
This is unfavorable because as per standard norms only 6,270 pounds of raw material was needed to produce 1,100 units of Zoom.
Final Answer
Direct Material Price Variance = $1,100 Favorable
Direct Material Quantity Variance = - $9,075 Unfavorable
