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Dodd Corporation used $90,000 of direct material, $112,000 of direct labor, and applied $104,000 of manufacturing overhead during July. Its beginning and ending work-in-process and finished goods inventories were as follows:

-The standard cost for direct labor is $190,000 if the company produces 15,200 units of product.Actual direct labor cost to produce 15,800 units of product totaled $213,300.What is price variance and is it favorable or unfavorable?
A)$19,800 Unfavorable
B)$23,300 Unfavorable
C)$19,800 Favorable
D)$23,300 Favorable

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Dodd Corporation used $90,000 of direct material, $112,000 of direct labor, and applied $104,000 of manufacturing overhead during July. Its beginning and ending work-in-process and finished goods inventories were as follows:
 
-The standard cost for direct labor is $190,000 if the company produces 15,200 units of product.Actual direct labor cost to produce 15,800 units of product totaled $213,300.What is price variance and is it favorable or unfavorable?
A)$19,800 Unfavorable 
B)$23,300 Unfavorable 
C)$19,800 Favorable 
D)$23,300 Favorable

Quizplus · Accepted Answer

Price variance = Actual cost - (Actual quantity x Standard price) 
Price variance = $213,300 - (15,800 x $190,000/15,200) 
Price variance = $23,300 unfavorable

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