A company reports the following for one of its products. Direct materials standard (4 pounds @ $2 per pound) $ 8 per unit Actual direct materials used (AQ) 340,000 pounds Actual units produced 65,000 units Actual cost of direct materials used $ 612,000 AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price Compute the direct materials price and quantity variances and identify each as favorable or unfavorable.

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A company reports the following for one of its products. Direct materials standard (4 pounds a $2 per pound) Actual direct materials used (AQ) Actual units produced Actual cost of direct materials used $ 8 per unit 340,000 pounds 65,000 units $ 612,000 AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price Compute the direct materials price and quantity variances and identify each as favorable or unfavorable. Actual Cost X X