Question

The following data are given for Stringer Company: Budgeted production 967 units Actual production 1,071 units Materials: Standard price per ounce $1.77 Standard ounces per completed unit 12 Actual ounces purchased and used in production 13,238 Actual price paid for materials $27,138 Labor: Standard hourly labor rate $14.29 per hour Standard hours allowed per completed unit 4.7 Actual labor hours worked 5,515.65 Actual total labor costs $84,114 Overhead: Actual and budgeted fixed overhead $1,091,000 Standard variable overhead rate $27.00 per standard labor hour Actual variable overhead costs $154,438 Overhead is applied on standard labor hours. Do not round interim calculations. Round your final answer to the nearest dollar. The direct materials price variance is

Answer 1

Answer:

Direct material price variance=  $3,706.64 unfavorable

Explanation:

Giving the following information:

Standard price per ounce $1.77

Actual ounces purchased and used in production 13,238

Actual price paid for materials $27,138

To calculate the direct material price variance, we need to use the following formula:

Direct material price variance= (standard price - actual price)*actual quantity

Actual price= 27,138 / 13,238= $2.05

Direct material price variance= (1.77 - 2.05)*13,238

Direct material price variance=  $3,706.64 unfavorable