Grand Display is a manufacturer of large flower pots for urban settings. The company has these standards:

Direct materials (resin). . . . . . . . . . . . . . . . . . . . . . . . . . 14 pounds per pot at a cost of $4.00 per pound

Direct labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0 hours at a cost of $17.00 per hour

Standard variable manufacturing overhead rate. . . . . $4.00 per direct labor hour

Budgeted fixed manufacturing overhead. . . . . . . . . . . $52,700

Standard fixed MOH rate. . . . . . . . . . . . . . . . . . . . . . . . . $9.00 per direct labor hour (DLH)

Grand Displayallocated fixed manufacturing overhead to production based on standard direct labor hours. Last month, the company reported the following actual results for the production of 2,100 flower pots:

Direct materials. . . . . . . . . . . . . . . . . . .	Purchased 31,670 pounds at a cost of $4.10 per pound; used 30,870 pounds to produce 2,100 pots
Direct labor. . . . . . . . . . . . . . . . . . . . . . .	Worked 3.5 hours per flower pot (7,350 total DLH) at a cost of $15.00 per hour
Actual variable manufacturing overhead. . . . . . . . . . . . . . . . . . . . . . . . .	$4.20 per direct labor hour for total actual variable manufacturing overhead of $30,870
Actual fixed manufacturing overhead	$52,500
Standard fixed manufacturing overhead allocated based on actual production. . . . . . . . . . . . . . . . . . . . . . .	$56,700

Requirements

1. Compute the direct material price variance and the direct material quantity variance.

2. Who is generally responsible for each variance?

3. Interpret the variances.

Requirement 1. Compute the direct material price variance and the direct material quantity variance. (Enter the variances as positive numbers. Enter currency amounts in the formula to the nearest cent and then round the final variance amount to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U). Abbreviations used: DM = Direct materials)

First determine the formula for the price variance, then compute the price variance for direct materials.