Question

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.$378.00 favorable

Answer 1

Answer:

Price variance will be $4512.5 ( Unfavorable )

Explanation:

We have given standard material cost per yard = $2

Actual material cost per yard = $2.10

Standard yards per unit = 4.5

And actual yards per unit = 4.75

Units of production = 9500

Total number of actual quantity used = 9500×4.75 = 45125

So direct material price variance = ( standard price - actual price ) × actual quantity used = ( $2 - $2.1 ) × 45125 = -$4512.5

So price variance will be $4512.5 ( Unfavorable )

Answer 2

Based on the standard price, the actual quantity purchased, and the actual price, the direct materials price variance is $4,512.50 Unfavorable.

How do you calculate the direct materials price variance?

This can be found by the formula:

= (Actual price - Standard price) x Actual quantity purchased

Solving gives:

= (2.10 - 2.00) x (9,500 x 4.75)

= 0.10 x 45,125

= $4,512.50 Unfavorable

The actual price is more than the standard price so this is unfavorable.

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