Nantucket, Inc

Essay

Nantucket, Inc.uses a standard cost system in which direct materials are carried at standard cost.Standards for one unit of product are: standard quantity of 2 feet, standard price $1.50 per foot.During May, Nantucket purchased 16,000 feet of direct material at a cost of $30,000 and used 15,500 feet in production of 7,500 units.
Required:
Calculate the direct materials price and quantity variances and indicate whether the variances are favorable or unfavorable.