Question

In: Accounting

The standard costs and actual costs for direct materials for the manufacture of 2,700 actual units...

The standard costs and actual costs for direct materials for the manufacture of 2,700 actual units of product are

Standard Costs
Direct materials (per completed unit) 1,040 kilograms @$8.64

Actual Costs
Direct materials 2,700 kilograms @ $8.20

Round your final answer to the nearest dollar.

The amount of direct materials price variance is

a.$458 favorable

b.$458 unfavorable

c.$1,188 unfavorable

d.$1,188 favorable

Solutions

Expert Solution

The Answer is D - "$1,188 Favorable"

Direct materials price variance = Actual Quantity x (Actual Price – Standard Price)

                                                = AQ x (AP – SP)

                                                = 2700 x (8.20 – 8.64)

                                                = - $ 1,188 (Negative, So Favorable)

ekkarill92 answered 1 year ago
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