Direct materials standard (4 lbs. @ $2 per lb.) Actual direct materials used (AD) Actual finished units produced Actual cost of direct materials used $ 8 per finished unit 320,000 lbs. 63,000 units $576,000 AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP - Standard Price Compute the direct materials price and quantity variances and classify each as favorable, unfavorable or no variance X SO Actual Cost AQ 320,000 x $ 576,000 AP $180 320,000 SP $ 200 Standard COSE X SP X $ 200 5 640,000 $ 64,000 $ $ Direct materials price variance Direct materials quantity variance Total direct materials variance 64,000 Favorable Unfavorable Unfavorable