Stones Inc. purchased and used 129,000 pounds of Zenon in production, at a total

Question

Stones Inc. purchased and used 129,000 pounds of Zenon in production, at a total cost of $1,548,000. Original production had been budgeted for 22,000 units with a standard material quantity of 5.7 pounds per unit and a standard price of $12 per pound. Actual production was 23,500 units. The direct materials cost variance is Select one: O a. $59,400 favorable b. $59,400 favorable c. $6,000 unfavorable O d. $59,400 unfavorable e. $59,400 unfavorable O f. $6,000 favorable g. $63,000 unfavorable h. None of the above i. $0 j. $63,000 favorable o

Explanation / Answer

Answer:

Option i is Correct.

Direct Material Cost Variance = (SP – AP) * AQ
Standard Price (SP) = $12 per Pound
AP * AQ = $1,548,000
Actual Quantity (AQ) = 129,000
Actual Price (AP) = $12

Direct Material Cost Variance = ($12 - $12) * 129,000
Direct Material Cost Variance = $0

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