Direct Materials Variances

The following data relate to the direct materials cost for the production of 1,800 automobile tires:

Actual:	59,900 lb. at $1.90
Standard:	58,700 lb. at $1.85

a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Price variance

$______________________

favorable OR unfavorable

Quantity variance	$____________________	favorable OR unfavorable

Total direct materials cost variance	$_________________________	favorable OR unfavorable

b. The direct materials price variance should normally be reported to the plant manager OR purchasing department. If lower amounts of direct materials had been used because of production efficiencies, the variance would be reported to the purchasing department OR production supervisor. If the favorable use of raw materials had been caused by the purchase of higher-quality raw materials, the variance should be reported to the purchasing department OR production supervisor.