The Brucker Company makes mugs for which the following standards have been developed:
$\begin{array}{lll}&\text { Standard Inputs Expected }&\text { Standard Price }\
\text { Expected }&\text { For Each Unit of Output }&\text { Per Unit of Input }\\hline
\text { Direct Materials } & 5 \text { ounces } & \$2 \text { per ounce } \
\text { Direct Labor } & 1.5 \text { hours } & \$ 8 \text { per hour }
\end{array}$
Production of 400 mugs was expected in July,but 440 mugs were actually completed.Direct materials purchased and used were 2,100 ounces at an actual price of $2.30 per ounce.Direct labor cost for the month was $5,310,and the actual pay per hour was $9.00.What is the direct material price variance for July?
A) $400 Favorable
B) $400 Unfavorable
C) $630 Favorable
D) $630 Unfavorable

Question

Quizplus · Accepted Answer

The direct material price variance is calculated as (Actual Price - Standard Price) x Actual Quantity. Here, it's ($2.30 - $2.00) x 2,100 ounces = $0.30 x 2,100 = $630 Unfavorable.

The Brucker Company Makes Mugs for Which the Following Standards