Question

Cavern company's output for the current period results in a $5,700 unfavorable direct material price variance. the actual price per pound is $60.50 and the standard price per pound is $57.50. how many pounds of material are used in the current period?

A. 5,393.

B. 5,110.

C. 3,500.

D. 3,750.

E. 4,000.

Answer 1

The calculation based on the direct material price variance and the prices given indicates that Cavern Company used 1,900 pounds of material in the current period.

Step-by-step explanation:

The question involves calculating the quantity of material used by Cavern Company, given an unfavorable direct material price variance. The formula for a direct material price variance is (Actual Price - Standard Price) × Actual Quantity.

We can solve for the Actual Quantity (the number of pounds of material used) since we are provided with both the actual price per pound of $60.50 and the standard price per pound of $57.50, and the price variance of $5,700. To find the Actual Quantity, we rearrange the formula to Actual Quantity = Price Variance / (Actual Price - Standard Price). Plugging in the numbers: $5,700 / ($60.50 - $57.50) results in an Actual Quantity of 1,900 pounds.