A company provided the following direct materials cost information. Compute the

Question

A company provided the following direct materials cost information. Compute the cost variance.     
   Standard costs assigned:    Direct materials standard cost (410,000 units @ $3 / unit) $1,230,000      Actual costs    Direct materials cost incurred  (408,750 units @ $3.20 / unit) $1,308,000   $81,750 Favorable. $78,000 Unfavorable. $78,000 Favorable. $81,750 Unfavorable. $3,750 Favorable. $81,750 Favorable. $78,000 Unfavorable. $78,000 Favorable. $81,750 Unfavorable. $3,750 Favorable. A company provided the following direct materials cost information. Compute the cost variance.

Explanation / Answer

Direct materials cost variance = (410000*3 - 408750*3.20) = $ 78000 Unfavorable

Answer: $78000 Unfavorable

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