Use the following to answer questions:
Stanton Co. uses the following standards in the production of its only product:
Direct material 18 pounds at $25 per pound
Direct labor: 6 hours at $18 per hour.
During March company records showed the following:

-The material purchase price variance is
A) $36,000 unfavorable
B) $36,000 favorable
C) $15,000 unfavorable
D) $15,000 favorable

Question

Use the following to answer questions:
Stanton Co. uses the following standards in the production of its only product:
Direct material 18 pounds at $25 per pound
Direct labor: 6 hours at $18 per hour.
During March company records showed the following:
 
-The material purchase price variance is
A) $36,000 unfavorable 
B) $36,000 favorable 
C) $15,000 unfavorable 
D) $15,000 favorable

Quizplus · Accepted Answer

The material purchase price variance is calculated as the difference between the actual cost and the standard cost of the materials purchased. A favorable variance occurs when the actual cost is less than the standard cost, indicating cost savings. Without specific numbers provided in the question, the correct answer is chosen based on the description of a favorable variance scenario.

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