Question
The standard costs and actual costs for direct materials, direct labor, and factory overhead for the manufacture of 2,500 units of product are as follows:
The standard costs and actual costs for direct materials, direct labor, and factory overhead for the manufacture of 2,500 units of product are as follows: Standard Costs Direct materials 2,500 kilograms @ $8 Direct labor 7,500 hours @ $12
Actual Costs Direct materials 2,600 kilograms @ $8.75 Direct labor 7,400 hours @ $11.40 Factory overhead (100% capacity 10,000 hrs.):
Variable cost @ $2 per hour Total variable cost, $18,000 Fixed cost @ $0.80 per hour Total fixed cost, $8,000
The following data relate to direct materials costs for November:
Actual costs 4,500 pounds at $6.00 Standard costs 4,600 pounds at $5.50
What is the direct materials price variance? a. $2,250 favorable
b. $2,250 unfavorable c. $2,300 unfavorable d. $1,700 unfavorable
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