Chapter 10, Problem 7E

EXERCISE 10-7 Direct Materials Variances LOIO-1

Refer to the data in Exercise 10-6. Assume that instead of producing 4,000 units during the month the company produced only 3,000 units using 14,750 pounds of material. (The rest of the material purchased remained in raw materials inventory.)

Required:

Compute the materials price and quantity variances for the month.