Question

Alpha Company manufactures Product P and sells it in packs of 10 units. The actual results for the first week in January are as follows: Actual production 25,000 packs of Product P Actual cost of raw material Q 95,500 units at $0.85 Actual cost of labor 500 hours at $6.25 Standard quantity of raw material 96,000 units for 25,000 units of Product P Standard price of raw material Q $0.77 Calculate the total material variance for Product P for the first week in January

Answer 1

Answer:
`67500`

The right solution is "13,675 U".

Step-by-step explanation:

According to the question,

The standard material cost will be:

=
`25000* ((90000)/(30000) )* 0.90`

=
`25000* 30000* 0.90`

=
`67,500`

The actual material cost will be:

=
`95500* 0.85`

=
`81,175`

hence,

The total material price variance will be:

=
`Actual \ cost - Standard \ cost`

=
`81175-67500`

= $
`13,675` (Unfavorable)