Question

he Strawberry Mansion Company reported the following: Standard quantity per unit 3 lbs Standard price per pound $2.75 Actual pounds used 15,000 lbs Actual price per pound $3.00 Number of units produced 4,900 Determine the direct materials price variance. a.$3,750 favorable b.$3,675 unfavorable c.$3,750 unfavorable d.$3,675 favorable

Answer 1

Direct material price variance= $3,750 unfavorable

Step-by-step explanation:

Giving the following information:

Standard price per pound $2.75

Actual pounds used 15,000 lbs

Actual price per pound $3.00

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= (2.75 - 3)*15,000

Direct material price variance= $3,750 unfavorable