QS 21-8 (Algo) Direct materials price and quantity variances LO P3 A company reports the following for one of its products. Direct materials standard (3 pounds @ $3 per pound) Actual direct materials used (AQ) Actual units produced Actual cost of direct materials used AQ Actual Quantity $ 9 per unit 250,000 pounds 60,000 units $ 687,500 SQ Standard Quantity AP Actual Price SP Standard Price Compute the direct materials price and quantity variances and identify each as favorable or unfavorable. Actual Cost AQ 250,000 AP $ 2.75 $ 687,500 Direct materials price variance Direct materials quantity variance Total direct materials variance AQ SP 250,000 $ 3.00 $ 750,000 $ 62,500 $ 62,500 Favorable 0 Unfavorable Unfavorable $ 0 Standard Cost SQ SP $ 3.00