Answer:
The Direct material Price Variance must be investigate as it is unfavorable.
Explanation:
The Direct material Price Variance is computed as:
Actual Cost
= Actual Quantity × Actual Price
= 22,060 × $12.40
= $273,544
= Actual Quantity × Selling Price
= 22,060 × $12.30
= $271,338
Direct material Price Variance = $271,338 - $273,544
= - $2,206 (unfavorable)
The Direct Material Quantity Variance is computed:
Standard Cost = Standard Quantity × Standard Price
= 24,480 × $12.30
= $301,104
Direct Material Quantity Variance = $301,104 - $271,338
= $29,766 (Favorable)
