A company provided the following direct materials cost information. Compute the direct materials price variance. Standard...

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Question

A company provided the following direct materials cost information. Compute the direct materials price variance. Standard...

A company provided the following direct materials cost information. Compute the direct materials price variance.


Standard costs assigned:
Direct materials standard cost (406,000 units @ $2.10/unit)	$	852,600
Actual costs:
Direct Materials costs incurred (404,850 units @ $2.30/unit)	$	931,155

Multiple Choice

$852,600 Favorable.
$852,600 Unfavorable.
$80,970 Unfavorable.
$80,970 Favorable.
$81,200 Favorable.

business accounting

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Answer 1

Answer #1

Materials Price Variance

= (SP-AP) *AQ

= (2.10 - 2.30) * 404,850

= 80,970 Unfavorable

Option C is the answer

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Answer 2

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