The following data relate to direct materials costs for November: Actual costs 4

Question

The following data relate to direct materials costs for November: Actual costs 4,500 pounds at $6.00 Standard costs 4,600 pounds at $5.50 What is the direct materials price variance?<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /> <?xml:namespace prefix = v ns = "urn:schemas-microsoft-com:vml" /> <?xml:namespace prefix = w ns = "urn:schemas-microsoft-com:office:word" />  a. $2,250 favorable   b. $2,250 unfavorable   c. $2,300 unfavorable   d. $1,700 unfavorable

Explanation / Answer

Hi,

Material Price Variance = Actual Qty *(AR - SR)

= 4500*(6 - 5,5) = 2300 (U)

Option C is correct.

Thanks.

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