Paw-Paw Products
Paw-Paw Products produces and sells flannel covered dogbeds. In the current year, Paw-Paw had expected to sell 8000 beds but actually produced and sold 8500 beds. The following information is available regarding the standard cost to produc
In the current year, 44 000 metres of material were purchased and used at a cost of $1.60 per metre and 365 500 direct labour minutes were incurred at a cost of $.23 per minute.
-The company's direct material price variance for the current year was:
A) $4250 F
B) $6650 U
C) $4400 U
D) $3750 F

Question

Quizplus · Accepted Answer

The direct material price variance is calculated as (Actual Price - Standard Price) x Actual Quantity. The standard price is $1.50 per metre, and the actual price is $1.60 per metre. The actual quantity purchased and used is 44,000 metres. Thus, the variance is ($1.60 - $1.50) x 44,000 = $0.10 x 44,000 = $4,400 Unfavorable.

Paw-Paw Products Paw-Paw Products Produces and Sells Flannel Covered Dogbeds. in the in the Current