Question

In: Accounting

The following data relate to direct materials costs for February: Materials cost per yard: standard, $1.90;...

The following data relate to direct materials costs for February:

Materials cost per yard: standard, $1.90; actual, $2.05
Standard yards per unit: standard, 4.69 yards; actual, 5.05 yards
Units of production: 9,500

Calculate the direct materials price variance.

a.$6,683.25 favorable

b.$1,425.00 unfavorable

c.$7,196.25 favorable

d.$7,196.25 unfavorable

Solutions

Expert Solution

Answer: Option (d) is correct

Direct material price variance = (Standard price - Actual Price)* Actual quantity

                                              = ($1.90 - $2.05) *47,975

                                              = $7,196.25 (Unfavourable)

Actual quantity = Actual yards per unit * Units of production

                            = 5.05 yards *9,500 units

                          = 47,975 units

ekkarill92 answered 2 months ago
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