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571 To illustrate, the direct materials quantity variance for Cowpoke Inc. is computed as Chapter 13 Budgeting and Standard Costs follows: Direct Materials Quantity Variance = (Actual Quantity Standard Quantity) X Standard Price = (7,300 sq yds. - 7,500 sq yds.) * $5.00 = $(1,000) Favorable Variance As shown above, Cowpoke Inc. has a favorable direct materials quantity variance of $(1,000) for June Direct Materials Variance Relationships The relationship among the total direct materials cost variance, the direct materials price variance, and the direct materials quantity variance is shown in Exhibit 23. Direct Marrials Vanance Relationships Actual cost: Actual quantity x Actual price 7,300 X $5.50 $40,150 Actual quantity * Standard price 7,300 x 55.00 $36,500 Standard cost Standard quantity x Standard price 7,500 X 55.00 = 537,500 Exhibit 23 Direct Materials Variance Relationships Direct 571 To illustrate, the direct materials quantity variance for Cowpoke Inc. is computed as Chapter 13 Budgeting and Standard Costs follows: Direct Materials Quantity Variance = (Actual Quantity Standard Quantity) X Standard Price = (7,300 sq yds. - 7,500 sq yds.) * $5.00 = $(1,000) Favorable Variance As shown above, Cowpoke Inc. has a favorable direct materials quantity variance of $(1,000) for June Direct Materials Variance Relationships The relationship among the total direct materials cost variance, the direct materials price variance, and the direct materials quantity variance is shown in Exhibit 23. Direct Marrials Vanance Relationships Actual cost: Actual quantity x Actual price 7,300 X $5.50 $40,150 Actual quantity * Standard price 7,300 x 55.00 $36,500 Standard cost Standard quantity x Standard price 7,500 X 55.00 = 537,500 Exhibit 23 Direct Materials Variance Relationships Direct

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