The following company information is available for March. The direct materials price variance is: Direct materials purchased and used 2,500 feet @ $55 per foot Standard costs for direct materials for March production 2,600 feet @ $53 per foot
A) $5,000 favorable.
B) $5,200 unfavorable.
C) $5,000 unfavorable.
D) $300 favorable.
E) $5,200 favorable.

Question

Quizplus · Accepted Answer

The direct materials price variance is calculated as follows:

Actual Quantity Purchased x (Actual Price - Standard Price)

= 2,500 x ($55 - $53)

= 2,500 x $2

= $5,000 unfavorable

Therefore, the correct answer is C, which represents a $5,000 unfavorable variance.

The Following Company Information Is Available for March