The following data is given for the Stringer Company: Budgeted production 1,011

Question

The following data is given for the Stringer Company:
Budgeted production   1,011 units
Actual production      909 units
Materials:  
    Standard price per ounce   $1.84
    Standard pounds per completed unit   11
     Actual pounds purchased and used in production   9,699
    Actual cost of materials   $19,883
Labor:  
    Standard hourly labor rate   $14.00 per hour
    Standard hours allowed per completed unit   5.0
     Actual labor hours worked   4,681.35
    Actual total labor costs   $71,391
Overhead:  
    Actual and budgeted fixed overhead   $1,135,361
    Standard variable overhead rate   $28.00 per standard labor hour
     Actual variable overhead costs   $131,078
Overhead is applied on standard labor hours.
Determine the direct material price variance. Round your answer to nearest whole number
Select the correct answer.
    $1,485 F  
   $3,818 U  
   $552 F  
   $2,037 U  

Explanation / Answer

Material price Variance = Actual Quantity * (Actual Rate - Standard Rate)

= 9699 * (19883/9699 - 1.84)

= 9699 * (2.05 - 1.84)

= 2037 (Unfavourable)

= $2037 U

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