Question

Keegan Inc. budgeted? 10,500 pounds of direct materials costing? $18.00 per pound to make? 4,900 units of product. The company actually purchased? 10,600 pounds of direct materials costing? $27.50 per pound to make the? 4,900 units. What is the direct materials price? variance?

A.$99,750 unfavorable
B.$100,700 favorable
C.$100,700 unfavorable
D.$99,750 favorable

Answer 1

C.$100,700 unfavorable

Step-by-step explanation:

The computation of the material price variance is shown below:

= Actual Quantity × (Standard Price - Actual Price)

= 10,600 pounds × ($18 - $27.50)

= 10,600 pounds × $9.5

= $100,700 unfavorable

Simply we take the difference between the standard and actual price and then multiplied it by the actual quantity so that the actual amount can come.