E1128A similar to Question Help Carthern ware is manufacture

E11-28A (similar to) Question Help Carthern ware is manufacturer of la\'ge now er pots lo\' u\' bari settings. The uompany has these standards. (Click the icon to view the standards ?(click the icon to view the actual results ) quirements .Cpute the direct material price variance and the direct material quantity variance 2. Who is genery responsible for each variance? 3. Interpret the variances. the direct material price variance and the direct matenal quantity vananre (Fnter the variances as positive numbers Fnter currency amounts in the tormula to the nearest cent and then round the final variance amount to the nearest Requirement 1. Compute whole dollar. Label the varisnce as favorable () or unfavorable (U) Abbrevietions used: DM- Direct materials) First determine the formula for the price variance, then compute the price variance for direct materials DM pwice variarke x (

Solution

Direct materials price variance = (SP – AP) x AQ

Direct materials quantity variance = SP x (SQ – AQ) .

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Answer to Part 1.a
Standard Price		$                 5.30
Actual Price		$                 5.00
Price Difference		$                 0.30
x Actual Quantity		17360.00
Material Price Var.		$         5,208.00
Actual Usage		17360.00
Standard Usage		16800.00
Difference		560.00
x Standard Price		$                 5.00
Material Qty Var.		$         2,800.00