Reference no: EM132946548

You are given the following information relating to standard and actual cost of product A.

1 unit of A needs 10 boxes of direct materials (standard usage);

Standard price of one box of materials is $15;

100 units of A were produced, and 900 boxes were used (actual usage);

The actual price for materials was $12 each box.

Required

Problem (1) Calculate the following variances:

(a) the direct material total variance;

(b) the direct material price variance;

(c) the direct material usage variance. 

Problem (2) Explain the concept of materiality in variance analysis