Paw-Paw Products Paw-Paw Products produces and sells flannel covered dogbeds. In the current year, Paw-Paw had expected to sell 8,000 beds but actually produced and sold 8,500 beds. The following information is available regarding the standard cost to produce a single dogbed:
In the current year, 44,000 yards of material were purchased and used at a cost of $1.60 per yard and 365,500 direct labor minutes were incurred at a cost of $.23 per minute.
Refer to the Paw-Paw Products information above. The company's direct material price variance for the current year is:
A) $4,250 F.
B) $6,650 U.
C) $4,400 U.
D) $3,750 F.

Question

Paw-Paw Products Paw-Paw Products produces and sells flannel covered dogbeds. In the current year, Paw-Paw had expected to sell 8,000 beds but actually produced and sold 8,500 beds. The following information is available regarding the standard cost to produce a single dogbed:
 In the current year, 44,000 yards of material were purchased and used at a cost of $1.60 per yard and 365,500 direct labor minutes were incurred at a cost of $.23 per minute.
Refer to the Paw-Paw Products information above. The company's direct material price variance for the current year is:
A) $4,250 F. 
B) $6,650 U. 
C) $4,400 U. 
D) $3,750 F.

Quizplus · Accepted Answer

The formula for direct material price variance is (actual price - standard price) x actual quantity purchased.

The actual price is $1.60 per yard, which is the same as the standard price.

The actual quantity purchased is 44,000 yards.

Therefore, the direct material price variance is ($1.60 - $1.55) x 44,000 = $4,400 U.

Paw-Paw Products Paw-Paw Products Produces and Sells Flannel Covered Dogbeds