A company uses the following standard costs to produce a single unit of output.
During the latest month,the company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output.Direct labor costs for the month totaled $56,350 based on 4,900 direct labor hours worked.Variable manufacturing overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was $10,400.
-Based on this information,the total direct materials cost variance for the month was:
A)$4,000 unfavorable
B)$4,000 favorable
C)$5,800 favorable
D)$5,800 unfavorable
E)$1,800 favorable

Question

A company uses the following standard costs to produce a single unit of output. 
During the latest month,the company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output.Direct labor costs for the month totaled $56,350 based on 4,900 direct labor hours worked.Variable manufacturing overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was $10,400.
-Based on this information,the total direct materials cost variance for the month was:
A)$4,000 unfavorable 
B)$4,000 favorable 
C)$5,800 favorable 
D)$5,800 unfavorable 
E)$1,800 favorable

Quizplus · Accepted Answer

The total direct materials cost variance is calculated as the difference between the actual cost and the standard cost of materials. The problem states a $4,000 unfavorable variance, indicating that the actual cost was $4,000 more than the standard cost.

A Company Uses the Following Standard Costs to Produce a Single