Answer:
Price 25,800 Favorable
Quantity 9,000 unfavorable
Explanation:
DIRECT MATERIALS VARIANCES
[tex](standard\:cost-actual\:cost) \times actual \: quantity= DM \: price \: variance[/tex]
std cost $3.00
actual cost $2.80
quantity 129,000
[tex](3.00 - 2.80) \times 129,000= DM \: price \: variance[/tex]
difference $0.20
The actual cost was lower than standard, the variance is positive.
price variance $25,800.00
we multiply the difference by the actual quantity purchased.
[tex](standard\:quantity-actual\:quantity) \times standard \: cost = DM \: quantity \: variance[/tex]
std quantity 126000.00
actual quantity 129000.00
std cost $3.00
[tex](126,000-129,000) \times 3.00 = DM \: quantity \: variance[/tex]
difference -3000.00
The actual lbs. used were higher, we use more than expected, the variance will be negative.
efficiency variance $(9,000.00)
We apply the standard cost to each extra lbs used to get the quantity variance
