Standard and Actual Costs for Direct Materials for the Manufacture $\begin{array}{ll}1,450 \mathrm{lbs.} @ \$ 8.10 & \text { Actual costs } \\1,500 \mathrm{lbs.} @ \$ 8.00 & \text { Standard costs }\end{array}$

question 127

Essay

Standard and actual costs for direct materials for the manufacture of 1,000 units of product were as follows:
$\begin{array}{ll}1,450 \mathrm{lbs.} @ \$ 8.10 & \text { Actual costs } \\1,500 \mathrm{lbs.} @ \$ 8.00 & \text { Standard costs }\end{array}$
Determine the (a) quantity variance, (b) price variance, and (c) total direct materials cost variance.

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Definitions:

Autonomous Spending

Spending that does not depend on the current level of national income or output, such as investments, government spending, and exports.

Aggregate Expenditure Line

A graphical representation showing the total planned spending on goods and services at different levels of national income.

Spending Multiplier

A factor by which a change in spending translates into a greater change in income and output throughout the economy.

Price Level

The calculated average price across the broad spectrum of goods and services in an economy.