Question

Garfield Company produces a commercial cleaning compound called Super Scrub. The direct materials and direct labor standards for one unit of Super Scrub are given below: Standard Quantity or Hours Standard Price or Rate Direct Materials 2.5 pounds $8.25 per pound Direct Labor 15 mins, or .25 hours $14.00 per hour During the most recent month, Garfield recorded the following activity: a) The company purchased 1,440 pounds of material at a cost of $8.35 per pound. b) All of the material purchased was used to make 600 units of Super Scrub. c) A total of 170 hours of actual direct labor time was recorded at an average rate of $13.50 per hour. (26) The materials cost variance was:

Answer 1

Direct material price variance= $144 unfavorable

Step-by-step explanation:

Giving the following information:

Standard Direct Materials 2.5 pounds $8.25 per pound.

During the most recent month, Garfield recorded the following activity: a) The company purchased 1,440 pounds of material at a cost of $8.35 per pound. b) All of the material purchased was used to make 600 units of Super Scrub.

Direct material price variance= (standard price - actual price)*actual quantity

Direct material price variance= (8.25 - 8.35)*1,440= $144 unfavorable