ABC Corporation has the following data related to direct materials costs for Nov
ID: 2537365 • Letter: A
Question
ABC Corporation has the following data related to direct materials costs for November: actual costs for 5,000 pounds of material, $4.50 And standard costs for 4,800 pounds of material at $5.20 per pound.
What is the direct materials price variance?
Please write-in your number followed by Favorable or Unfavorable. (Make sure Favorable/Unfavorable is capitalized) Example $5,000 Unfavorable
(Each answer should have possibilities for answers entered with or without dollar signs and commas. Thus the correct answer for a problem could be $100,000 100,000 100000 $10000)
In order to earn credit for your answers to the problems, you are required to show all supporting work.
Explanation / Answer
Direct material price variance = (Standard price-actual price)actual quantity
= (5.20-4.50)*5000
Direct material price variance = $3500 Favorable