The following materials standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: The direct materials purchases variance is computed when the materials are purchased.
Required:
a.What is the materials price variance for the month?
b.What is the materials quantity variance for the month?

Materials Standards

Benchmarks or specifications set for the quality, quantity, and cost of materials used in production to achieve performance and efficiency goals.

Direct Materials Purchases Variance

This term refers to the difference between the actual cost of materials purchased and the expected (standard) cost of materials needed to manufacture the products during a specific period.

Materials Price Variance

The difference between the actual cost of materials and the expected (standard) cost.