(Solved): Direct Materials Variances Alvarado Company produces a product that requires \( 3.0 \) standard pou ...

Direct Materials Variances Alvarado Company produces a product that requires \( 3.0 \) standard pounds per unit. The standard price is \( \$ 6.00 \) per pound. If 8,000 units used 23,900 pounds, which were purchased at \( \$ 6.20 \) per pound, what is the direct materials (a) price variance, (b) quantity variance, and (c) cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Feedback: 7 Check My Work Unfayorable variances can be thought of as increasing costs. (a debit). Favorable variances can be thought of as decreasing costs (a credit). Cost variance is the difference between the actual and standard total cost.