Lucas Company has set standards for the manufacturing of clay pots to be 2 pound

Question

Lucas Company has set standards for the manufacturing of clay pots to be 2 pounds of direct materials, per pot, at a cost of $3 per pound. During the current period, 600 pounds of direct materials were purchased for $1842. All of the direct materials were used to manufacture 295 pots. Lucas's direct materials price variance was a. $42 (U). b. $72 (F). c. $0. d. $72 (U). Lucas Company has set standards for the manufacturing of clay pots to be 2 pounds of direct materials, per pot, at a cost of $3 per pound. During the current period, 600 pounds of direct materials were purchased for $1842. All of the direct materials were used to manufacture 295 pots. Lucas's direct materials price variance was a. $42 (U). b. $72 (F). c. $0. d. $72 (U).

Explanation / Answer

[Materials Price Variance = (Actual quantity purchased × Actual price) - (Actual quantity purchased × Standard price)] 600*(1842/600-3) =$42 U a. $42 (U)

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