Question

Century Manufacturing developed the following per-unit standards for its product: 4 pounds of direct materials at $6.40 per pound. Last month, 3,000 pounds of direct materials were purchased for $18,240. The direct materials price variance for last month was

Answer 1

price variance 960.00 F

Step-by-step explanation:

`(standard\:cost-actual\:cost) * actual \: quantity= DM \: price \: variance`

std cost $6.40

actual cost $6.08 (18,240 total cost/ 3,000 units purchased)

quantity 3,000

`(6.40 - 6.08) * 3,000 = DM \: price \: variance`

difference $0.32

3,00 x 0.32 = price variance

price variance $960.00

The actual cost was below the standard. It cost less to purchase each pound. This variance is favorable