Question

Summerlin Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units. The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units. What is the direct materials price variance?

Answer 1

$450 unfavorable

Step-by-step explanation:

We have given

Actual price per unit of direct material AP = $5.00

And standard unit price of direct material SP = $5.10

Actual quantity of direct material used AQ = 4500

We have to find the direct material price variance

We know that direct material price variance is given by

`=(SP-AP)* AQ=(5.10-5.00)* 4500=$450unfavorable`