Madden Corporation manufactures t - shirts, which is its only product. The stand

Question

Madden Corporation manufactures t - shirts, which is its only product. The standards for t - shirts are as follows: Standard direct materials cost per yard $5 Standard direct materials quantity per t - shirt (yards) 1.5 During the month of May, the company produced 1,000 t - shirts. Related production data for the month follows: Actual yards of direct material purchased 1,900 Actual direct materials total cost $15,500 What is the direct materials puce variance for the month? $6,000 unfavorable $10,600 unfavorable $6 000 favorable $10, 500 favorable

Explanation / Answer

Direct material price variance = (Standard price - Actual Price) * Actual quantity

= { 5 - (15500/1900) } * 1900

= Aprox 6000 Unfavorable i.e. option A

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