Jackson Industries has collected the following data for one of its products: Dir

Question

Jackson Industries has collected the following data for one of its products: Direct Materials Standard (6 pounds per unit 55 cents per pound) Actual Direct Materials Purchased was 38,000 pounds Actual Direct Materials Used was 35,000 pounds Actual Price paid per pound was 60 cents How much is the Direct Materials Price Variance? dollar 1,900 (Unfavorable) Dollar 1,750 (Favorable) dollar 1,900 (Favorable) dollar 1,750 (Unfavorable) The following information describes a company's usage of direct labor it Actual direct labor hours used: 34,000

Explanation / Answer

A) $ 1900 Unfavourable

The planned expense was 38000*$0.55 = $20900

But Actual expense was 38000*$0.60 =$22800

The variance = $20900-$22800 = -$1900

So the variance is Unfavourable $1900

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