Ring World produces class rings. Its best-selling model has a direct materials standard of 13 grams of a special alloy per ring. This special alloy has a standard cost of $66.00 per gram. In the past month, the company purchased 13,300 grams of this alloy at a total cost of $871,150. A total of 13,200 grams were used last month to produce 1,000 rings. - Requirements 1. What is the actual cost per gram of the special alloy that Ring World purchased last month? 2. What is the direct material price variance? 3. What is the direct material quantity variance? 4. How might the direct material price variance for the company last month be causing the direct material quantity variance? Requirement 1. What is the actual cost per gram of the special alloy that Ring World purchased last month? (Round your answer to the nearest cent.) The actual cost per gram of the special alloy that Ring World purchased last month is Requirement 2. What is the direct material price variance? (Abbreviations used: DM = Direct materials) Begin by determining the formula for the price variance, then compute the price variance for direct materials. (Enter the variance as a positive number. Round interim calculations to the nearest cent and your variance amount to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U).) Actual quantity purchased x Actual price Standard price ) - DM price variance $ F Requirement 3. What is the direct material quantity variance? (Abbreviations used: DM = Direct materials) Determine the formula for the quantity variance, then compute the quantity variance for direct materials. (Enter the variance as a positive number. Round interim calculations to the nearest cent and your variance amount to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U).) Standard price x Actual quantity used Standard quantity allowed = DM quantity variance $ CA x U Requirement 4. How might the direct material price variance for the company last month be causing the direct material quantity variance? The favorable direct material price variance might mean that Ring World purchased a lower-quality alloy at a lower price As a result, the company had to use more alloy than the standard allows. This accounts for the unfavorable quantity (efficiency) variance