A company provided the following direct materials cost information.Compute the cost variance.
A)$2,500 Favorable.
B)$78,250 Favorable.
C)$78,250 Unfavorable.
D)$80,750 Favorable.
E)$80,750 UnfavorablE.Actual cost $888,250 - Standard cost $810,000 = $78,250 U

Question

A company provided the following direct materials cost information.Compute the cost variance. 
A)$2,500 Favorable. 
B)$78,250 Favorable. 
C)$78,250 Unfavorable. 
D)$80,750 Favorable. 
E)$80,750 UnfavorablE.Actual cost $888,250 - Standard cost $810,000 = $78,250 U

Quizplus · Accepted Answer

The cost variance is calculated by subtracting the actual cost from the standard cost. In this case, the actual cost is $888,250 and the standard cost is $810,000. Therefore, the cost variance is $78,250 unfavorable (actual cost - standard cost = $78,250 U).

A Company Provided the Following Direct Materials Cost Information