Information on OCP's direct materials costs for the current month is as follows: actual quantity of...
Information on OCP's direct materials costs for the current month is as follows: actual quantity of direct materials purchased and used, 30,000 pounds; actual cost of direct materials, $84,000; direct materials efficiency variance, $3,000 U; standard quantity of direct materials allowed for the current month's production, 29,000 pounds. Based on the presented information, OCP's direct materials price variance for the month is closest to
| a. |
$2,800 F |
|
| b. |
$2,800 U |
|
| c. |
$6,000 U |
|
| d. |
$6,000 F |
Homework Answers
| Answer | ||
| The Answer Is D : $ 6,000 F | ||
| Material Quantity Variance=Standard Price(Standard Quantity -Actual Quantity) | ||
| -3,000 =Standard Price(29,000-30000) | ||
| -3,000 =Standard Price(-1000) | ||
| Standard Price =$3 per unit | ||
| Material Price Variance= Actual quantity required (Standard price - actual price) | ||
| =30000(3-(84000/30000)) | ||
| =30000(3-2.8) | ||
| =30000*0.2 | ||
| =$6,000(Favourable) | ||
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