Determine quantity variance and price variance


Problem:

Standard and actual costs for direct materials for the manufacture of 1,000 units of product were as follows:

Actual costs        1,550 lbs. @ $9.10
Standard costs    1,600 lbs. @ $9.00

Determine the (a) quantity variance, (b) price variance, and (c) total direct materials cost variance.

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Accounting Basics: Determine quantity variance and price variance
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