Question
Precilla Company uses a standard costing system that allows 2.0 pounds of direct materials for one finished unit of product. During July, the company purchased
Precilla Company uses a standard costing system that allows 2.0 pounds of direct materials for one finished unit of product. During July, the company purchased 51,000 pounds of direct materials for $392,700, and manufactured 13,100 finished units. The standard direct materials cost allowed for the units manufactured is $196,500. The performance report shows that Pricilla has an unfavorable direct materials usage variance of $3,500. Also, the company records any price variance for materials at time of purchase.
The direct materials purchase-price variance in July (to the nearest dollar) was:
Multiple Choice
- $108,550 unfavorable.
- $102,000 unfavorable.
- $112,200 unfavorable.
- $10,200 unfavorable.
- $61,200 unfavorable.
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