Compute the following variances for the month of June

1 Direct material price variance

: (Standard price - actual price) *Actual quantity use

Actual quantity use :- $15,400/7=2200 Pound

(6.50 - 7)*2200 = - $1,100 of $1,100( Unfavorable)

2 Direct material quantity variance

(Standard quantity - Actual quantity) *Standard price

Standard quantity for 1,000 units :

1.6*1000=1600 Pound

: (1,600 - 2200)*6.50 = - 3900 or 3900 Unfavorable

3 Direct Material purchase prices variance :

(Standard price - actual price) *Material Purchase

(6.50 - 7)*3400 =-$1700 or $1700 Unfavorable

4 Direct labour rate variance

Actual hours use:- 79,236/18.6= 4260 hours

(Standard rate - actual rate) *Actual hours

(18.4 - 18.6)*4260 =-$852 or 852 Unfavorable

5 Direct labour efficiency variance

(Standard hours - Actual hours) * Standard rate

Standard hours for 1000 units =2.9*1000=2900hours

(2900 - 4260)*18.4 = - $ 25024 or $25024 Unfavorable