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25 September, 08:09

The following data relate to direct materials costs for February: Materials cost per yard: standard, $2.00; actual, $2.10 Standard yards per unit: standard, 4.5 yards; actual, 4.75 yards Units of production: 9,500 Calculate the direct materials price variance. a.$378.00 favorable

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  1. 25 September, 09:09
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    Price variance will be $4512.5 (Unfavorable)

    Explanation:

    We have given standard material cost per yard = $2

    Actual material cost per yard = $2.10

    Standard yards per unit = 4.5

    And actual yards per unit = 4.75

    Units of production = 9500

    Total number of actual quantity used = 9500*4.75 = 45125

    So direct material price variance = (standard price - actual price) * actual quantity used = ($2 - $2.1) * 45125 = - $4512.5

    So price variance will be $4512.5 (Unfavorable)
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