Question

Garland Company uses a standard cost system. The standard for each finished unit of product allows for 3 pounds of plastic at $0.72 per pound. During December, Garland bought 4300 pounds of plastic at $0.75 per pound, and used 4000 pounds in the production of 1300 finished units of product. What is the direct materials purchase price variance for the month of December

Answer 1

Direct material price variance= $129 unfavorable

Step-by-step explanation:

Giving the following information:

The standard for each finished unit of the product allows $0.72 per pound. During December, Garland bought 4300 pounds of plastic at $0.75 per pound.

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

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

Direct material price variance= (0.72 - 0.75)*4,300

Direct material price variance= $129 unfavorable