alternatively, if actual costs are less than standard costs, the variance If actual costs are greater than standard costs, the variance is unfavorable is favorable Direct Materials Cost Variance Calculating Direct Materials Cost Variance, you can see that the actual costs are higher than standard and the actual quantity purchased and used is less than standard. The two variances are combined for a total favorable direct material cost variance of $ Direct Labor Cost Variance than Calculating Direct Labor Cost Variance, you can see that the actual costs are higher than standard and the actual hours are less standard. The two variances are combined for a total favorable direct labor cost variance of $ The standard cost sheet for a product is shown. Standard Cost per unit Manufacturing Costs Standard price Standard Quantity Direct materials $4.40 per pound 5.50 pounds $ 24.20 Direct labor $12.28 per hour 2.30 hours $ 28.24 Overhead $1.90 per hour 2.30 hours $ 4.37 $ 56.81 The company produced 3,000 units that required: 17,000 pounds of material purchased at $4.25 per pound 6,800 hours of labor at an hourly rate of $12.58 per hour Actual overhead in the period was $13,540 Fill in the Budget Performance Report for the period. Some amounts are provided. Round your answers to the nearest dollar. However, do not round your intermediate calculations. Budget Performance Report Manufacturing Costs: 3,000 units Actual Costs Standard Costs Variance (Favorable) Unfavorable Direct materials $72,250 Direct labor 84,732 Overhead 13,540 $892 Split the direct materials cost variance into the materials price varaince and the Direct materials quantity variance. Remember that you want to isolate the price variance from the quantity variance so be sure to use factors that do not overlap. Also remember that the two variances should equal the total direct material cost variance. Direct materials price variance: Direct materials quantity variance: (Actual price - Standard price) x quantity (Actual quantity - Standard quantity) x price