Question

During November, TaskMaster purchased 160,000 pounds of direct materials at a total cost of $304,000. The total factory wages for November were $42,000, 90% of which were for direct labor. TaskMaster manufactured 19,000 units of product during November using 142,500 pounds of direct materials and 5,000 direct labor hours. Is the direct materials price variance favorable or unfavorable

Answer 1

Answer: the price is unfavorable

Explanation: because it is

[(304,000/160,000) - $1.80] ⋅160,000 = $16,000