Exercise 15-16 (Algo) Direct material variances-solving for price and usage variances LO 15-4, 15-5 Fiberworks Company is a manufacturer of fiberglass toy boats. The company has recently implemented a standard cost system and has designed the system to isolate variances as soon as possible. During the month of May, the following results were reported for the production of 24,900 toy boats: Direct materials (fiberglass) purchased Direct materials issued into production Standard pounds allowed per boat Standard price per pound Cost of fiberglass purchased Required: 50,100 pounds 40,300 pounds 1.54 pounds $ 6.54 $ 310,119 a. Calculate the actual cost per pound of fiberglass purchased during May. Note: Round your answer to 2 decimal places. b. Calculate the direct materials purchase price variance for May. Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). c. Calculate the direct materials usage variance for May. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). d. In the case of raw materials, the control point for the price variance is at the time of purchase rather than when the raw materials are issued into production. a. Actual cost $ 6.19 per pound b. Direct materials purchase price variance IF c. Direct materials usage variance U d. In the case of raw materials, the control point for the price variance is at the time of purchase rather than when the raw materials are issued into production True