Question

The actual cost of direct materials is​ $47.50 per pound. The standard cost per pound is​ $51.75. During the current​ period, 7,200 pounds were used in production. The standard quantity for actual units produced is​ 7,100 pounds. How much is the direct materials price​ variance? A. ​$30,600 favorable B. ​$30,600 unfavorable C. ​$30,175 favorable D. ​$30,175 unfavorable

Answer 1

A. ​$30,600 favorable

Step-by-step explanation:

The computation of the direct material price variance is shown below:

Direct Materials Price Variance = Actual quantity used × (Actual Cost - Standard Cost)

= 7,200 pounds ×($47.50 per pound - $51.75 per pound)

= $30,600 Favorable

Hence, the direct material price variance is $30,60 favorable

So the same should be considered