Copy of The standard cost of Product B includes 2 units of direct materials at $
ID: 2586629 • Letter: C
Question
Copy of The standard cost of Product B includes 2 units of direct materials at $4 per unit. During June, 20,790 units of direct materials were purchased and used at a cost of $4.3 per unit to produce 10,100 units of Product B Compute the variance requested below and indicate whether the variance is favorable or unfavorable, by indicating U or F. Place the letter by the number, DO NOT add a space. Example, if the variance is 100 unfavorable, enter 100U (DO NOT PUT 100 U) The Direct Materials spending variance is $Explanation / Answer
The Direct Materials Spending Variance = (Actual Quantity * Actual Price ) - ( Actual Quantity * Standard Price)
= ( 20,790 * $ 4.3) - ( 20,790 * $ 4)
= $ 6,237 Unfavorable
Since the Actuals is more than the Standard, the Variance is Unfavorable.
Hence the correct answer is 6237U