Direct Materials Variances

Alvarado Company produces a product that requires $16$ standard pounds per unit. The standard price is $$10\mathrm{.}00$ per pound. If $3,400$ units used $56,000$ pounds, which were purchased at $$10\mathrm{.}2$ per pound, what is the direct materials $($a$)$ price variance, $($b$)$ quantity variance, and $($c$)$ cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

a$.$ Direct materials price variance

b$.$ Direct materials quantity variance

c$.$ Direct materials cost variance

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Unfavorable variances can be thought of as increasing costs $($a debit$).$ Favorable variances can be thought of as decreasing costs $($a credit$).$

Cost variance is the difference between the actual and standard total cost.