The standard cost of Product B includes 2 units of direct materials at $5 per un

Question

The standard cost of Product B includes 2 units of direct materials at $5 per unit. During June, 16,750 units of direct material were purchased and used at a cost of $4.7 per unit to produce 9,100 units of Product B.

Compute the variance requested below and indicate whether the variance is favorable or unfavorable, by indicating U or F. Place the letter by the number, DO NOT add a space. Example, if the variance is 100 unfavorable, enter 100U (DO NOT PUT 100 U)

The Direct Materials price variance is $

Explanation / Answer

BUDGETED (1 UNIT) STANDARD (9100 UNITS) ACTUAL (9100 UNITS) UNITS PRICE AMOUNT UNITS PRICE AMOUNT UNITS PRICE AMOUNT 2 5 10 18200 5 91000 16750 4.7 78725 (2 * 9100) Direct Materials price variance = (Standard price -Actual Price) * Actual Units ( 5 - 4.7) * 16750 $ 5025 Favourable Ans $ 5025F

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