The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound.In manufacturing 8,000 units,47,000 pounds of material were used at a cost of $51 per pound.What is the direct materials price variance?
A)$47,000 unfavorable.
B)$47,000 favorable.
C)$50,000 unfavorable.
D)$50,000 favorable.
E)$3,000 favorable.

Question

Quizplus · Accepted Answer

The formula to calculate Direct Materials Price Variance is:
(Difference between Actual Price and Standard Price) x Actual Quantity of Materials Purchased.

Here,
Standard Price = $50 per pound
Actual Price = $51 per pound
Actual Quantity of Material Purchased = 47,000 pounds

So, Direct Materials Price Variance = ($51-$50) x 47,000
= $47,000 unfavorable

Therefore, the correct answer is A, $47,000 unfavorable.

The Standard Materials Cost to Produce 1 Unit of Product