Question - Lightin' Slow Co. has developed a new puzzle called the Brainbuster. The company has a standard cost system to help control costs and has established the following standards for the Brainbuster.
Direct Materials: 8 diodes per puzzle at $0.30 per diode
During a very mild August in Atlanta, Lightnin' Slow Co. actually produced 5,000 Brainbuster puzzles. These 5,000 puzzles used 50,000 diodes at an actual cost $0.28 per diode. All 50,000 diodes were used and there was no ending inventory.
Required: Compute the Direct materials price and quantity variances. Use the back of your answer sheet.