A company reports the following for one of its products. Direct materials standard (3 pounds @ $2 per pound) Actual direct materials used (AQ) Actual units produced Actual cost of direct materials used $6 per unit 260,000 pounds 70,000 units $ 455,000 AQ-Actual Quantity SQ = Standard Quantity AP= Actual Price SP=Standard Price Compute the direct materials price and quantity variances and identify each as favorable or unfavorable.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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A company reports the following for one of its products.
Direct materials standard (3 pounds @ $2 per pound)
Actual direct materials used (AQ)
Actual units produced
Actual cost of direct materials used
$6 per unit
Actual Cost
260,000 pounds
70,000 units
$ 455,000
AQ Actual Quantity
SQ Standard Quantity
AP Actual Price
SP Standard Price.
Compute the direct materials price and quantity variances and identify each as favorable or unfavorable.
Standard Cost
Transcribed Image Text:A company reports the following for one of its products. Direct materials standard (3 pounds @ $2 per pound) Actual direct materials used (AQ) Actual units produced Actual cost of direct materials used $6 per unit Actual Cost 260,000 pounds 70,000 units $ 455,000 AQ Actual Quantity SQ Standard Quantity AP Actual Price SP Standard Price. Compute the direct materials price and quantity variances and identify each as favorable or unfavorable. Standard Cost
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