The following materials standards have been established for a particular product: Standard quantity per unit of output 9.2 grams Standard price 14.70 per gram The following data pertain to operations concerning the product for the last month: 5,500 grams Actual materials purchased Actual cost of materials purchased Actual materials used in production Actual output $76,450 5,100 grams 540 units The direct materials purchases variance is computed when the materials are purchased. Required: a. What is the materials price variance for the month? b. What is the materials quantity variance for the month? Solution