Question

Swifty Co. produces wooden boxes. The company’s standards per box require 7 boards, each costing $9 per board, and half of an hour of direct labour. The standard labour rate is $15 per hour. In August, Swifty Co. purchased 11920 boards for a total cost of $123600. It used 11600 boards to manufacture 1960 boxes. Total labour hours were 1080 hours, and total labour costs were $16350. What was the materials purchase price variance for August? $16320 F $16320 U $19200 F $19200 U

Answer 1

Answer :$16320 Unfavourable
Standard unit cost	=	$9 per board
Actual Unit cost	=	$10.37
($123600/11920)
Actual quantity	=	11920
Material price variance = ( Actual unit cost- standard unit cost)* actual quantity
	=	($10.37-$9)*11920
	=	$16320 Unfavourable