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 (419,000 units @ $3.00/unit)	$	1,257,000
Actual costs:
Direct Materials costs incurred (416,000 units @ $3.20/unit)	$	1,331,200

Multiple Choice

$1,257,000 Favorable.
$1,257,000 Unfavorable.
$83,200 Unfavorable.
$83,200 Favorable.
$83,800 Favorable.

business accounting

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Answer 1

Answer #1

OPTION: $83200 Unfavorable

EXPLANATION:

Material price variance = actual quantity purchased x (standard price - actual price)

= 416000 x ($3 - $3.20)

= $83200 Unfavorable

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Answer 2

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