Question

During November, TaskMaster purchased 208,000 pounds of direct materials at a total cost of $436,800. The total factory wages for November were $54,000, 90% of which were for direct labor. TaskMaster manufactured 24,000 units of product during November using 182,000 pounds of direct materials and 5,000 direct labor hours. TaskMaster computes direct material variances at the time of purchase. What is the direct materials price variance for November

Answer 1

See below

Explanation:

Given the above information,

Direct material price variance is computed as;

= (Actual price - Standard price) × Actual quantity

Actual price = $436,800/208,000

Standard price = $436,800/182,000

Actual quantity = 208,000

Direct material price variance

=[ ($436,800 / 208,000) - ($436,800 / 182,000 ] × 208,000

= ($2.1 - $2.4) × 208,000

= $62,400 unfavourable