1. Direct Materials Variances

   The following data relate to the direct materials cost for the production of 2,500 automobile tires:

   Actual:	53,600 lbs. at $1.95 per lb.
   Standard:	54,700 lbs. at $2.00 per lb.

   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.

   Direct Materials Price Variance	$_________________
   Direct Materials Quantity Variance	$_________________
   Total Direct Materials Cost Variance	$__________________

   b. The direct materials price variance should normally be reported to the______________ . When lower amounts of direct materials are used because of production efficiencies, the variance would be reported to the____________ . When the favorable use of raw materials is caused by the purchase of higher-quality raw materials, the variance should be reported to the________________ .