Calculate the direct material price and usage variances

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Question - Roland Fruits Inc. produces peach jam. The company developed the following standard costs for a jar of jam:

 

Grams

Cost per
Gram

Total
Cost

Direct materials

60.00

$0.20

$12.00

The actual results for the year are:

Units produced 220,000

Direct materials purchased and used (grams) 13,420,000

Direct materials cost per gram $0.18

Required - Calculate the direct material price and usage (also called efficiency) variances and use your solution to answer the following questions.

The amount of the direct material price variance is $____________.

Indicate if the direct material price variance is favourable (enter the letter F) or unfavourable (enter the letters UF).

The amount of the direct material usage variance (also called efficiency variance) is $____________.

Indicate if the direct material usage variance is favourable (enter the letter F) or unfavourable (enter the letters UF).

Reference no: EM133169535

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