Question

The standard costs and actual costs for direct materials for the manufacture of 2,200 actual units of product are as follows: Standard Costs Direct materials 1,040 kilograms at $8.96 Actual Costs Direct materials 2,200 kilograms at $8.00 The direct materials price variance is a.$998 favorable b.$2,112 favorable c.$998 unfavorable d.$2,112 unfavorable

Answer 1

Answer:

b. 2,112 Favorable

Explanation:

Given that

Actual Quantity = 2,200

Standard Price = $8.96

Actual Price = $8

The computation of direct price variance is given below:-

= Actual Quantity × (Standard Price - Actual Price)

= 2,200 × ( $8.96 - $8)

= 2,200 × (0.96)

= 2,112 Favorable

So, the standard price is higher that actual price, so the direct price variance will be favorable.