Question
Sanford Ltd. produces a product with the following standard cost card: Direct materials (19 kg) $49.86 Direct labour (7 hours) 84.00 Variable overhead (7 hours)
Sanford Ltd. produces a product with the following standard cost card:
| Direct materials (19 kg) | $49.86 |
| Direct labour (7 hours) | 84.00 |
| Variable overhead (7 hours) | 21.00 |
| Fixed overhead (7 hours) | 35.00 |
The fixed overhead rate is based on a standard monthly volume of 15976 units.
The actual results for the month of July 20x5 are as follows:
| Direct materials purchased and used (381027 kg) | $609265 |
| Direct labour (93,000 hours) | 1,023,000 |
| Variable overhead | 320,000 |
| Fixed overhead | 580,000 |
| Units produced and sold | 15,500 units |
What is Sanfords direct materials price variance for July 20x5? Note: a negative number represents an unfavourable variance and a positive number represents a favourable variance.
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