Select the correct statement from the following, assuming Camacho Company had a favorable direct materials price variance of $2,300 and an unfavorable direct materials usage variance of $1,600. Multiple Choice The total direct materials variance is $3,900 unfavorable. The total direct materials variance is $700 favorable. The total direct materials variance is $3,900 favorable. The total direct materials variance is $700 unfavorable.

Question

Aldo Johnston

Business

4 September, 05:32

Select the correct statement from the following, assuming Camacho Company had a favorable direct materials price variance of $2,300 and an unfavorable direct materials usage variance of $1,600. Multiple Choice The total direct materials variance is $3,900 unfavorable. The total direct materials variance is $700 favorable. The total direct materials variance is $3,900 favorable. The total direct materials variance is $700 unfavorable.

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Answers (1)

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Acevedo · Answer 1

The total direct materials variance is $700 favorable.

Explanation:

Total Direct Material Variance = Material Quantity Variance + Material Price Variance

Material Quantity Variance = $1,600 Unfavorable that means it is negative value

Material Price Variance = $2,300 Favorable that means it has positive value

Now joining both we get total material variance = - $1,600 + 2,300

= $700

Since value is positive it is favorable

Therefore, Total Material Variance = $700 Favorable