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 (4 pounds @ $2 per pound) Actual direct materials used (AQ) Actual units produced Actual cost of direct materials used AQ Actual Quantity $ 8 per unit 340,000 pounds 72,000 units $ 612,000 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 x 340,000 x $ 1.80 $ 612,000 Direct materials price variance Direct materials quantity variance Total direct materials variance $ 0 AQ 340,000 x $ 0 Favorable 0 Unfavorable Unfavorable $ 0 Standard Cost SQ x