The Harwood Company makes Harwood tables for which the following standards have

Question

The Harwood Company makes Harwood tables for which the following standards have been developed: Standard Inputs Standard Price Expected for Each Expected per Unit of Output Unit of Output Direct materials 10 pounds $4 per pound Direct labor 3 hours $16 per hour Company planned to produce 200 tables in the month. The actual production was 220 tables. Direct materials purchased and used were 2,100 pounds at an actual price of $4.40 per pound. The company incurred actual direct labor costs of $10,620 for total 590 hours. What is the direct material price variance for March? a. $840 favorable b. Correct answer not listed c. $800 favorable d. $800 unfavorable e. $840 unfavorable

Explanation / Answer

Direct Material Price Variance = ( Standard Price per unit - Actual Price per unit) X Actual Quantity

= ( $4 - $4.40 ) X 2,100

= - $ .40 X 2,100

= ( $ 840 ) or $ 840 unfovorable

So Correct option is e) $840 Unfavorable

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