Standard Costs and Variances

Gala Enterprises reports the following information regarding the production on one of its products for the month.

Direct materials standard (4 lbs. @ $2/lb.)	$8 per finished unit
Actual direct materials used	390,000 lbs.
Actual finished units produced	90,000 units
Actual cost of direct materials used	$770,000

Requirement 1:

Compute the direct materials cost variance and identify as either F for favorable or U for unfavorable.

Cost variance = , F/U

Requirement 2:

Compute the direct materials price variance and identify as either F for favorable or U for unfavorable.

Price variance = , F/U

Requirement 3:

Compute the direct material quantity variance and identify as either F for favorable or U for unfavorable.

Quantity variance = , F/U