Question

Roncy Manufacturing uses enhanced powder plastics (EPP) to manufacture a high-pressure board, Dura-Plastic. Information concerning its operation in June was as follows: Master Budget units of Dura-Plastic to manufacture 8,000 Units of Dura-Plastic manufactured in June 9,000 Budgeted amount of EPP to purchase 70,000 oz. EPP material purchased 76,000 oz. EPP material used in production 72,000 oz. Standard cost of EPP used in production $ 478,800 Standard quantity of EPP per unit of Dura-Plastic 7.5 oz. Cost of EPP purchased $ 574,560 The direct materials purchase-price variance for June, to the nearest dollar, was:

Answer 1

Direct material price variance= $69,160 unfavorable

Step-by-step explanation:

To calculate the direct material price variance, we need to use the following formula:

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

Standard price= 478,800/72,000= $6.65

Actual price= 574,560/76,000= $7.56

Direct material price variance= (6.65 - 7.56)*76,000

Direct material price variance= $69,160 unfavorable