Chapter 23, Problem 9E

To determine

Material Price Variance:

At the actual quantity, the difference between the actual cost and standard cost is known as material price variance.

Material Quantity Variance:

The material quantity variance measures the efficiency of a production in terms of material utilization. It is computed by determining the difference between the standard quantity to used and actual quantity of material used in the production at the standard rate.

To determine:

Computation of variances and indicate whether the variances as favorable and unfavorable

1. Direct material price variance

2. Direct material quantity variance