Question

Heavy Products, Inc. developed standard costs for direct material and direct labor. In 2017, AII estimated the following standard costs for one of their major products, the

10−gallon

plastic container.

	Budgeted quantity	Budgeted price
Direct materials	0.7 pounds	$50 per pound
Direct labor	0.05 hours	$25 per hour

During June, Heavy Products produced and sold

23,000

containers using

20,000

pounds of direct materials at an average cost per pound of

$53

and

16,100

direct manufacturing

labor-hours

at an average wage of

$25.50

per hour.

The direct material price variance during June is ________.

Answer 1

(53 - 50) x 20,000 = 60,000