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    Bayou Resins Company: determine the price variance, quantity variance, total direct materials variance and more...

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    Problem concerning "Bayou Resins Company". Please help with this problem.

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    a) Direct Materials
    Price Variance= Standard Price $3.40 less Actual Price $3.50 = Unfavorable Price variance $0.10
    Quantity Variance = Standard Quantity 6000 less Actual Quantity 5930 = Favorable Quantity variance 70 pounds.
    Direct Materials Cost Variance:
    Standard Cost $6000 x $3.40 = $20,400 less Actual Cost $5930 x $3.50 = 20,755 gives us Unfavorable Direct Materials Cost variance of $355.

    b) Direct Labor
    Rate Variance = Standard rate $18.00 less Actual Rate $18.50 = Unfavorable Rate variance $0.50.
    Time Variance = ...

    Solution Summary

    This solution provides steps necessary to evaluate performance using variances from standard costs.