irect Materials Variances

he following data relate to the direct materials cost for the production of $2,400$ automobile tires:

Actual: $,52,800lbs.$ at $$1\mathrm{.}95$ per $Ib.$

Standard: $,54,400lbs,$ at $$1\mathrm{.}90$ per $lb.$

Direct Materials Price Variance

Direct Materials Quantity Variance

Total Direct Materials Cost Variance

Unfavorable $>$

Favorable

Favorable

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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$).$

The direct material cost variance is the difference between the actual and standard material cost per quantity manufactured.