A company reports the following for one of its products. Direct materials standard (4 pounds @ $2 per pound) $ 8 per unit Actual direct materials used 300,000 pounds Actual units produced 60,000 units Actual cost of direct materials used $ 540,000 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 (4 pounds
@ $2 per pound) $ 8 per unit Actual direct
materials used 300,000 pounds Actual units
produced 60,000 units Actual cost of direct
materials used $ 540,000 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.
Transcribed Image Text:A company reports the following for one of its products. Direct materials standard (4 pounds @ $2 per pound) $ 8 per unit Actual direct materials used 300,000 pounds Actual units produced 60,000 units Actual cost of direct materials used $ 540,000 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.
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