Wiskundeforum

Question: Geneva Gizmos AG has set the following direct material standards for its product, the photon gismo.

Standard costs for one unit of output:
Material I, 10 units of input at 6€ per unit
Material II, 20 units of input at 2€ per unit

During august, the company had the following requirements:
Universal gismos produced 2000 Materials purchased and used:
Material I: 22.000 units at 6,25€
Material II: 38.000 units at 1,80€

Question is: Compute the direct material price and quantity variances.

Answers are: Price variances 2100€ favorable Quantity variances 8000€ unfavorable

I have no idea how they got that answer, can someone help me? Thanks !!

22000*(6-6,25)+38000*(2-1,8)=-5500+7600=2100

6*(20000-22000)+2*(40000-38000)=-12000+4000=-8000

Dirk