Question

Im having trouble with figuring out how to find the quantity and Price variances.

Is there a formula? Thanks

**I figured out how to get the price variance, Just struggling with the quantity variance. Thanks

West Texas Chemical Company manufactures a product called Kylon, which requires three raw materials. Production is in batches of 1,000 gallons of finished product. The firm uses standard costs as a control device. Its standard costs for materials for each batch of Kylon have been established as follows: Standard Cost Standard Cost Material Quantity per Gallon per Batch Starter 730 gal. $ 1.40 $ 1,022.00 Acid 190 gal. 4.00 760.00 Activator 80 gal. 11.00 880.00 Total 1,000 gal. $ 2,662.00 standard cost The output is packaged in 50-gallon drums. During the month of June 2019, 200 drums of Kylon were produced. There was no beginning or ending inventory of work in process. The materials actually used during June are listed below: Material Quantity Starter 7,370 gal. Acid 1,940 gal. Activator 560 gal. Cost per Gallon $ 1.30 4.40 14.30

Answer 1

Data for variance
	Standard (1000 gallons)				Standard (10000 gallons)				Actual (10000 gallons)
	Quantity	Price	Amount		Quantity	Price	Amount		Quantity	Price	Amount
Starter	730	$      1.40	$ 1,022.00		7300	$      1.40	$ 10,220.00		7370	$      1.30	$ 9,581.00
Acid	190	$      4.00	$    760.00		1900	$      4.00	$   7,600.00		1940	$      4.40	$ 8,536.00
Activator	80	$    11.00	$    880.00		800	$    11.00	$   8,800.00		560	$    14.30	$ 8,008.00

Direct Material Quantity Variance =				(Standard Quantity - Actual Quanity) x Standard Price
		Starter	=	(7300 - 7370) x $ 1.4
			=	$      98.00	(Unfavorable)
		Acid	=	(1900 - 1940) x $ 4
			=	$    160.00	(Unfavorable)
		Activator	=	(800 - 560) x $ 11
			=	$ 2,640.00	(Favorable)

As you've stated that you've figured out how to compute price variance, I've helped in solving the quantity variance only. Just let me know if you find any solution incorrect.