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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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  1. 4 September, 05:59
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    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
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