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the following data relate to the direct materials cost for the production of 2,000 automobile tires: actual: 60,700 lbs. at $1.9 per lb. standard: 61,900 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 $fill in the blank 1 0.05 favorable direct materials quantity variance $fill in the blank 3 1,200 favorable total direct materials cost variance $fill in the blank 5 5,375 favorable



Answer :

Direct material price variance is -$3,035, direct material quantity variance is -$5375 and direct material cost variance is $2340.

Give a brief account on total manufacturing cost variance.

The direct labor cost fluctuation, direct material cost variance, and factory overhead cost variance make up the overall manufacturing cost variance. The actual expenses incurred during the course of the time are different from the baseline costs determined at the start. Total manufacturing cost variation is the difference between actual and standard production costs. This variance may be advantageous or detrimental.

To solve the question :

To calculate direct material price variance :

AQ x (AP - SP)

Therefore,

DMPV = 60,700 x ($1.90 - $1.95) = -$3,035

To calculate direct material quantity variance

SP x (AQ - SQ)

Therefore,

DMQV = $1.95 x (60,700 - 61,900) = -$2340

To calculate direct material cost variance :

AP x AQ - SP x SQ

Therefore,

DMCV = $1.90 x 60,700 - $1.95 x 61,900

= $115,330 - $120,705 = -$5375

DMCV is the sum of DMPV and DMQV

= (-$3,035) - (-$5375) =$2340

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