Answer:
price variance 3,940 U
quantity variance 2,800 F
Explanation:
DIRECT MATERIALS VARIANCES
[tex](standard\:cost-actual\:cost) \times actual \: quantity= DM \: price \: variance[/tex]
std cost $7.00
actual cost $7.10
quantity 39,400
[tex](7 - 7.10) \times 39,400 = DM \: price \: variance[/tex]
difference $(0.10)
price variance $(3,940.00)
The difference between std cost and actual cost is negative, we purchased at a higher cost. the variance is unfavorable.
[tex](standard\:quantity-actual\:quantity) \times standard \: cost = DM \: quantity \: variance[/tex]
std quantity 39,000.00 (7,800 manufactured units x 5 lbs per unit)
actual quantity 39,400.00
std cost $ 7.00
[tex](39,000 - 39,400) \times 7 = DM \: quantity \: variance[/tex]
difference -400.00
quantity variance $ (2,800.00)
We used more lbs than our standard for the output. This means we are not efficient in the use of materials. this variance is unfavorable as well
