Answer:
Total Direct Materials Variance: -3,750
Price Variance 2,430
Efficienty Variance -6,000
Explanation:
DIRECT MATERIALS VARIANCES
[tex](standard\:cost-actual\:cost) \times actual \: quantity= DM \: price \: variance[/tex]
std cost $ 2.00
actual cost $ 1.99 ($483,750/243,000)
quantity 243,000
difference $ 0.01
price variance $ 2,430.00
Difference is positive, each units cost less, so the price variance is positive.
[tex](standard\:quantity-actual\:quantity) \times standard \: cost = DM \: efficiency \: variance[/tex]
std quantity 240,000 (40,000 x 6 lbs per unit)
actual quantity 243,000
std cost $2.00
difference -3,000
efficiency variance $(6,000.00)
Difference is negative, the efficienty variance is negative.
Total Variance: 2,430 - 6,000 = -3,570
