Refer to Cornerstone Exercise 9.1. Guillermo’s Oil and Lube Company provided the following information for the production of oil changes during the month of June:
Actual number of oil changes performed: 980
Actual number of quarts of oil used: 6,020 quarts
Actual price paid per quart of oil: $5.10
Standard price per quart of oil: $5.05
Required:
1. Calculate the direct materials price variance (MPV) and the direct materials usage variance (MUV) for June using the formula approach.
2. Calculate the direct materials price variance (MPV) and the direct materials usage variance (MUV) for June using the graphical approach.
3. Calculate the total direct materials variance for oil for June.
4.  What if the actual number of quarts of oil purchased in June had been 6,100 quarts, and the materials price variance was calculated at the time of purchase? What would be the materials price variance (MPV)? The materials usage variance (MUV)?

Exercise 9.1

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Bertgon Manufacturing has the following standard cost sheet for one of its products: Direct materials (6 ft. @ $5) Direct labor (1.5 hours @ $10) Variable overhead (1.5 hours @ $4) Fixed overhead (1.5 hours @ $2*) S30 15 3 Standard unit cost $54 * Rate based on expected activity of 17,000 hours. During the most recent year, the following actual results were recorded: 12,000 units $ 33,000 $ 69,000 $361,620 $182,580 Production Fixed overhead Variable overhead Direct materials (71,750 ft. purchased) Direct labor (17,900 hours)