Parallel Enterprises has collected the following data on one of its products.During the period the company produced 25,000 units.The direct materials price variance is:
A)$27,500 unfavorable.
B)$50,000 unfavorable.
C)$50,000 favorable.
D)$22,500 unfavorable.
E)$22,500 favorable.

Question

Parallel Enterprises has collected the following data on one of its products.During the period the company produced 25,000 units.The direct materials price variance is: 
A)$27,500 unfavorable. 
B)$50,000 unfavorable. 
C)$50,000 favorable. 
D)$22,500 unfavorable. 
E)$22,500 favorable.

Quizplus · Accepted Answer

Without knowing the actual direct materials cost per unit or the standard direct materials cost per unit, we cannot determine the exact amount of the direct materials price variance. However, since the answer options only include unfavorable or favorable variances, we can make an educated guess based on the fact that the variance is likely unfavorable since it is listed first in the answer options. Therefore, the best choice is D, $22,500 unfavorable.

Parallel Enterprises Has Collected the Following Data on One of Its