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Part 7 Variance Analysis Product X has a standard direct material cost as follows 20 kilograms of material A at $50 per kg During a

Part 7 Variance Analysis

Product X has a standard direct material cost as follows 20 kilograms of material A at $50 per kg

During a period of production, 160 units of X were manufactured, using 3,300 kgs of material A which cost $150,000

Required:

(1) Calculate the following variances: (a) the direct material total variance; (b) the direct material price variance; (c) the direct material usage variance.

(2) Explain the concept of materiality in variance analysis

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