Part 1
Direct Material Price variance:
Actual Cost of direct materials used	Actual quantity used x Standard price	DM price variance	(be sure to include if the variance is FAVORABLE or UNFAVORABLE)
			(show any calculations in this line)
Direct Material Quantity variance:
Actual quantity used x Standard price	Standard quantity used x Standard price	DM quantity variance	(be sure to include if the variance is FAVORABLE or UNFAVORABLE)
	(Hint: for standard quantity, take the 30,000 units x 1/2 pound of materials required per unit)
			(show any calculations in this line)
Part 2
Direct Labor Rate variance
Actual Cost of direct labor	Actual DL hours used x Standard rate per hour	DL rate variance	(be sure to include if the variance is FAVORABLE or UNFAVORABLE)
			(show any calculations in this line)
Direct Labor Efficiency variance:
Actual DL hours used x Standard rate per hour	Standard DL hours x Standard rate per hour	DL efficiency variance	(be sure to include if the variance is FAVORABLE or UNFAVORABLE)
	(Hint: for standard hours, take 30,000 units x 1/6 hours of direct labor required per unit)
			(show any calculations in this line)

Tercer reports the following on one of its products. Compute the direct materials price and quantity variances.

Direct materials standard (4 lbs. @ $2/lb.)	$8 per finished unit
Actual direct materials used	300,000 lbs.
Actual finished units produced	60,000 units
Actual cost of direct materials used	$535,000