ZTC Limited uses a standard costing system for its products. ZTC Limited produces soft drinks. Each litre of soft drink uses 0.5 litres of fruit juice at a standard cost of £0.40 per litre. Budgeted production for June is 50,000 litres of soft drinks. Actual production for June was 55,000 litres. Total fruit juice used in June was 28,000 litres which cost £11,500. Based on the above information, what is the direct material price variance for June?
A) £200 Unfavourable
B) £300 Unfavourable
C) £500 Unfavourable
D) £1,500 Unfavourable

Question

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The Answer of ZTC Limited uses a standard costing system for its products. ZTC Limited produces soft drinks. Each litre of soft drink uses 0.5 litres of fruit juice at a standard cost of £0.40 per litre. Budgeted production for June is 50,000 litres of soft drinks. Actual production for June was 55,000 litres. Total fruit juice used in June was 28,000 litres which cost £11,500. Based on the above information, what is the direct material price variance for June?
A) £200 Unfavourable
B) £300 Unfavourable
C) £500 Unfavourable
D) £1,500 Unfavourable

ZTC Limited Uses a Standard Costing System for Its Products