A 1 Problem 1: Direct Material Variances B C D E F G 2 3 The standard costs and actual costs for direct materials for the manufacture of 3,000 actual units of product 4 5 Actual Standard 6 Material price per pound of direct material $8.00 $8.75 7 Quantity of material in pound per unit of produ 0.65 0.45 8 Actual production untis of product 3,000 9 10 Required: 11 Compute the followings variances and indicate if they are favorable or unfavorable 12 A. Direct material Price variance (DMPV) 13 B. Direct material Quantity variance (DMQV) 14 C. Total Direct material Cost variance (DMCV) 15 16 Solution: 17 18 A. DMPV (AP-SP) x AQ for Actual Production 19 20 21 B. DMQV (AQ - SQ) for Actual Production x SP 22 23 24 C. DMCV DMPV + DMQV 25 26 Actual cost per unit of product (AC): 27 Standard costs per unit of product (SC): 28 29 Alternate formula to compute DMCV 30 (Actual cost-standard cost) per unit x # of units 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 Problem1 Problem2 Problem3 Problem4 Problem 5 Ready G H J K L M N Acronyms: AP = Actual price per unit of Material SP = Standard price per unit of Material AQ = Actual quantity of Material for Actual production SQ = Standard quantity of Material for Actual