Direct Materials Cost Variance Calculating Direct Materials Cost Variance, you can see that the actual costs are higher V J than standard and the actual quantity purchased and used is less V J than standard. The two variances are combined for a total favorable V J direct material cost variance of $ X . Direct Labor Cost Variance Calculating Direct Labor Cost Variance, you can see that the actual costs are higher V \\l than standard and the actual hours are less V J than standard. The two variances are combined for a total favorable V \\/ direct labor cost variance of 35:] X . Feedback V Check My Work The illustrations provide the information to complete the problem. The standard cost sheet for a product is shown. Direct materials $4.60 per pound 6.20 pounds $ 28.52 Direct labor $11.78 per hour 2.10 hours $ 24.74 Overhead $2.20 per hour 2.10 hours 35 4.62 $ 57.88 The company produced 3,000 units that required: - 19,100 pounds of material purchased at $4.45 per pound a 6,220 hours of labor at an hourly rate of $12.18 per hour - Actual overhead In the period was $14,260 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. Variance Manufacturing Costs: Actual Standard (Favorable)/ 3,000 units Costs Costs Unfavorable D' ct t ' l $84 995 $ $ Ire ma eria s ' 85,560 \\/ 565 J Direct labor 74,214 Overhead 14,260 13,860 J 400 J $ $ '/ [E ,/ $1,381 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 3e sure to use factors that do not overlap. Also remember that the two variances should equal the total direct material cost variance. 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 (Actual quantity - Standard quantity) x actual V J quantity standard V J price 2'865 favorable V J 2'300 unfavorable V J Split the direct labor cost variance into the direct labor rate variance and the direct labor time variance. Remember that you want to isolate the price variance from the efficiency variance so be sure to use factors that do not overlap. Also remember that the two variances should equal the total direct labor cost variance. Direct labor rate variance: Direct labor time variance: (Actual rate - Standard rate) x aCtLlal V J (Actual hours - Standard hours) x hours standard V J labor rate 2g488 unfavorable V J 942 favorable V J Manufacturing variances are period costs that are rolled into cost of sales V J and reported on the income statement V J . A favorable variance is recorded as a credit V J and an unfavorable variance is recorded as a debit V J