Question

The following data relate to direct materials costs for February: Materials cost per yard: standard, $1.98; actual, $2.03 Standard yards per unit: standard, 4.69 yards; actual, 4.93 yards Units of production: 9,300 Calculate the direct materials price variance.

Answer 1

Answer:

-$2,292.45 Unfavorable

Explanation:

According to the given situation, the computation of direct materials price variance is shown below:-

Material price variance = (Standard price - Actual price) × Actual quantity

= ($1.98 - $2.03) × 9,300 × 4.93

= -$0.05 × 9,300 × 4.93

= -$2,292.45 Unfavorable

Therefore for computing the material price variance we simply applied the above formula.