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) $1,795.50 favorable
B) $378.00 favorable
C) $4,512.50 unfavorable
D) $378.00 unfavorable

Question

Quizplus · Accepted Answer

The direct materials price variance is calculated as (Actual Price - Standard Price) x Actual Quantity. Here, it is ($2.10 - $2.00) x (4.75 yards/unit x 9,500 units) = $0.10 x 45,125 = $4,512.50 unfavorable.

The Following Data Relate to Direct Materials Costs for February