Berends Corporation makes a product with the following standard costs: The compa

Question

Berends Corporation makes a product with the following standard costs:

The company reported the following results concerning this product in April.

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The materials price variance for April is:

Question options:

$17,180 U

$16,192 F

$16,192 U

$17,180 F

Standard Quantity or Hours Standard Price or Rate Direct materials 9.2 pounds $3.00 per pound Direct labor 0.3 hours $17.00 per hour Variable overhead 0.3 hours $3.00 per hour

Explanation / Answer

Material Price Variance = (Standard Price - Actual Price) * Actual Quantity purchased = Std Price * Actual Qty Purchased - Actual Price * Actual Qty = $3*85900 - $240520 = $257700 - $240520 = $17180 (F)

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