Use the following data that relate to product no. 89 of Mansion Corporation to answer the following Questions
Direct material standard: 3 square feet at $2.50 per square foot
Direct material purchased: 30,000 square feet at $2.60 per square foot
Direct material consumed: 29,200 square feet
Manufacturing activity: 9,600 units completed

Assume that the company computes variances at the earliest point in time.

-The direct-material price variance is:
A) $2,880U.
B) $2,920F.
C) $2,920U.
D) $3,000F.
E) $3,000U.

Question

Use the following data that relate to product no. 89 of Mansion Corporation to answer the following Questions
Direct material standard: 3 square feet at $2.50 per square foot
Direct material purchased: 30,000 square feet at $2.60 per square foot
Direct material consumed: 29,200 square feet
Manufacturing activity: 9,600 units completed

Assume that the company computes variances at the earliest point in time.

-The direct-material price variance is:
A) $2,880U.
B) $2,920F.
C) $2,920U.
D) $3,000F.
E) $3,000U.

Quizplus · Accepted Answer

The direct-material price variance is calculated as (Actual Price - Standard Price) x Actual Quantity Purchased. Here, it is ($2.60 - $2.50) x 30,000 = $0.10 x 30,000 = $3,000 Unfavorable, because the actual price per square foot is higher than the standard price.

Use the Following Data That Relate to Product No