The Zhang Manufacturing Company purchased 4,000 pounds of direct material at \($5.20\) per pound. It used 2,700 pounds to make 5,000 finished units. The standard cost for direct material is \($5\) per pound and the quantity standard is 0.5 (one-half) pound per finished unit.

Required:

a. According to the appropriate standard, how much should the company have paid for the 4,000 pounds of direct material purchased?

b. Determine the direct material price variance based on the amount of direct material purchased.

c. According to the appropriate standard, how many pounds of direct material should have been used to make the 5,000 finished units?

d. Determine the direct material quantity variance in pounds of direct material.

e. Determine the direct material quantity variance in dollars.

f. Appendix: Prepare the following journal entries:

1. Record the purchase of direct material.

2. Record the use of direct material.