2. MC Qu. 29 The Russell Company provides the following s... The Russell Company

Question

2. MC Qu. 29 The Russell Company provides the following s... The Russell Company provides the following standard cost data per unit of product: Direct material (3 gallons $6 per gallon) 18.00 Direct labor (2 hours S10 per hour) 20.00 During the period, the company produced and sold 22,000 units incurring the following costs Direct ma 68,000 gallons $5.90 per gallon Direct labor 45.500 hours S9.75 per hour The direct material price variance was: $6.600 untavorable. O$6,600 favorable. O $6,800 unfavorable. 0 $6,800 favorable.

Explanation / Answer

1 Actual rate 5.9 per gallon Direct material price variance = (Standard rate -Actual rate) * Actual quantity Direct material price variance = (6 -5.90) *66000 Direct material price variance = 6600 Favorable 2 Flexible budget 13000 Static budget 12000 Difference in sales 1000 Sales price per unit 65 Sales volume variance 65000 Favorable

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