Reference: 21_04
A company has established 5 pounds of Material M at $2 per pound as the standard for the material in its Product A. The company has just produced 1,000 units of this product, using 5,200 pounds of Material M that cost $9,880.
-The direct materials price variance is:
A) $520 unfavorable
B) $400 unfavorable
C) $120 favorable
D) $520 favorable
E) $400 favorable

Question

Quizplus · Accepted Answer

$9,880 - ($2 x 5,200 pounds) = $520 favorable

Reference: 21_04 a Company Has Established 5 Pounds of Material M at M