Question
Milton Company uses a standard cost system. Standards call for 2 direct labor hours per widget. The standard labor rate is $10 per hour. Four
Milton Company uses a standard cost system.
Standards call for 2 direct labor hours per widget. The standard labor rate is $10 per hour.
Four pounds of material are needed for each widget at a standard cost of $2.25 per pound.
Milton actually produces 17,000 widgets during the year.
Direct labor costs are $359,100 for 34,200 hours.
Milton purchases 70,000 pounds of materials at $2.50 per pound, and used 65,400 pounds of those materials
(the rest are in inventory at the end of the year)
For direct materials, what is the price variance? Answers are labeled as favorable (F) or unfavorable (U).
A. $16,350 U
B. $18,000 U
C. $10,500 U
D. $17,000 U
E. $17,500 U
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started