Question

Myers Corporation has the following data related to direct materials costs for November: actual cost for 4,650 pounds of material at $5.40 and standard cost for 4,490 pounds of material at $6.20 per pound. The direct materials price variance is a.$992 favorable b.$3,720 unfavorable c.$3,720 favorable d.$992 unfavorable

Answer 1

Direct material price variance= $3,720 favorable

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

Actual cost= $5.4

Standard cost= $6.2

Actual quantity= 4,650

Direct material price variance= (6.2 - 5.4)*4,650

Direct material price variance=$3,720 favorable