Ask Question
25 October, 09:13

Using the following information, compute the direct material price variance: Actual production, usage, and costs: * units produced: 13,325 units * Direct materials purchased: 132,600 pounts at $5.60 per pound * Direct materials used: 131,900 pounds * Direct labor: 34,450 hours used at a total cost of $347,945 * Machine hours used: 53,235 * Variable manufacturing overhead: $370,516 The following standards were in place for one unit of this product at the beginning of the year: Standard Quantity Standard Price Standard Cost per unit Direct Material 10 pounds per unit $5.50 per pound $55.00 per unit Direct Labor 2.6 hours per unit $10.00 per labor hour $26.00 per unit Variable Overhead 4 machine hours per unit $7.00 per machine hour $28.00 per unit Total standard cost $109.00 per unit Multiple Choice $13,260 Unfavorable $700 Favorable $7,425 Favorable $7,425 Unfavorable

+4
Answers (1)
  1. 25 October, 09:37
    0
    Material price variance = $13,260 unfavorable

    Explanation:

    Material price variance

    A material price variance occurs where materials are purchased at a price either lower or higher than the standard price. A favorable variance is recorded where the actual total cost of materials is lower that the standard cost. While an adverse variance implies the opposite

    $

    132,600 pounds should have cost (132,600*$5.50) = 729,300

    but did cost (actual cost - (132,600 * $5.60) = 742,560

    Material price variance 13,260 unfavorable
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Using the following information, compute the direct material price variance: Actual production, usage, and costs: * units produced: 13,325 ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers