A company purchased 10,000 pounds of raw materials at a cost of $2.50 per pound. However, the standard price per pound was $2.00. 1. Calculate the direct materials price variance. 2. Determine if this is favorable or unfavorable and explain why. 3. Explain why this is important for raw materials purchasing.

A company purchased 10,000 pounds of raw materials at a cost of $2.50 per pound. However, the standard price per pound was $200. 1. Calculate the direct materials price variance. 2. Determine if this is favorable or unfavorable and explain why. 3. Explain why this is important for raw materials purchasing