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?

Explanation / Answer

Direct Material Price variance = ( standard Price - actual Price ) * Actual quantity purchase

= ($4 - $4.4) * 2100

= 840 U

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