The standard materials cost to produce one unit of Product K is 7 pounds of material at a standard price of $32 per pound.In manufacturing 8,000 units,54,000 pounds of material were used at a cost of $30 per pound.What is the total direct material cost variance?
A) $108,000 favorable
B) $ 64,000 favorable
C) $172,000 favorable
D) $ 44,000 favorable
E) $104,000 favorable

Question

Quizplus · Accepted Answer

Price variance = $2 x 54,000 pounds = $108,000 favorable
Quantity variance = 2,000 pounds x $32 = $64,000 favorable
Total direct material cost variance = $172,000 favorable

The Standard Materials Cost to Produce One Unit of Product