Welch Company budgeted the following cost standards for the current year: Direct materials = 1.40 kilograms per unit @ $1.50 per kilogram
Direct labour = 0.75 hours per unit @ $6 per hour
Actual production and costs were as follows:
Units produced = 2,800
Direct materials used = 4,500 kg.
Direct materials purchased = 5,000 kg. @ a cost of $5,850
Direct labour incurred = 2,000 hours at a cost of $13,000
The material price variance for materials purchased was:
A)$1,650 F
B)$870 U
C)$2,520 U
D)$780 F

Question

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The Answer of Welch Company budgeted the following cost standards for the current year: Direct materials = 1.40 kilograms per unit @ $1.50 per kilogram
Direct labour = 0.75 hours per unit @ $6 per hour
Actual production and costs were as follows:
Units produced = 2,800
Direct materials used = 4,500 kg.
Direct materials purchased = 5,000 kg. @ a cost of $5,850
Direct labour incurred = 2,000 hours at a cost of $13,000
The material price variance for materials purchased was:
A)$1,650 F
B)$870 U
C)$2,520 U
D)$780 F

Welch Company Budgeted the Following Cost Standards for the Current