Question: An entity recently set-up its standard costs for its direct materials. The entity sets the benchmark at 3 units of direct materials per product at

An entity recently set-up its standard costs for its direct materials. The entity sets the benchmark

at 3 units of direct materials per product at a standard price of P5 per unit of direct material.

During the year, the entity acquired 400 units of direct materials at a total cost of P2,400. The

entity also manufactured 100 products using 250 units of direct materials.

Question #1

What is the direct material price variance?

Question #2

What is the direct material usage variance?

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