Question 1: Calculate the material purchase price variance, which is
(actual price – standard price) × actual quantity of materials used
Question 2: Work out the actual hours worked, to the nearest hour, remembering that the direct labour usage variance is equal to:
(actual labour hours – standard labour rate hours) × standard labour rate



Standard unit price of materials £9.00
Actual unit price of materials £8.68
Standard quantity of material for actual production (units)  


Actual quantity of materials purchased and used (units)  


Standard direct labour rate £28.00
Actual direct labour rate £24.40
Standard direct labour hours 24,000
Direct labour usage variance £28,280 U
= unfavourable or adverse



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