Chapter 11, Problem 11.5SE

Calculate direct material variances when the quantity purchased differs from the quantity used (Learning Objective 2)

Mitchell Products manufactures faux boulders to be used in various landscaping applications. A special resin is used to make the boulders. The standard quantity of resin used for each boulder is 2 pounds. Mitchell Products uses a standard cost of $1.80 per pound for the resin. The company produced 11,000 boulders in June. In that month, 21,750 pounds of resin were purchased at a total cost of $43,500. A total of 21,500 pounds were used in producing the boulders in June.

Requirements

1. 1. Calculate the direct material price variance.
2. 2. Calculate the direct material quantity variance.