Summerlin Company budgeted 5,100 pounds of material costing $5.00 per pound to p

Question

Summerlin Company budgeted 5,100 pounds of material costing $5.00 per pound to produce 2,100 units. The company actually used 5,600 pounds that cost $5.10 per pound to produce 2,100 units. What is the direct materials price variance?

a$2,500 unfavorable.

b$560 unfavorable.

c$510 unfavorable.

d$2,550 unfavorable.

e$3,060 unfavorable.

Summerlin Company budgeted 5,100 pounds of material costing $5.00 per pound to produce 2,100 units. The company actually used 5,600 pounds that cost $5.10 per pound to produce 2,100 units. What is the direct materials price variance?

Explanation / Answer

(Actual price - Budgeted price) x Actual quantity = Direct material price variance

5.10-5.00)*5,600=$560 Favorable.

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