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Ivenika [448]
3 years ago
9

A company provides the following data for material costs: Standard cost per unit 3 pounds at $2 per unit Actual cost per unit 2.

5 pounds at $3 per unit During the month, 5,000 pounds of raw materials were purchased. What is the direct material price variance?
Business
1 answer:
satela [25.4K]3 years ago
6 0

Answer:

Direct material price variance= $5,000 unfavorable

Explanation:

Giving the following information:

Standard cost per unit 3 pounds at $2 per unit

Actual cost per unit 2.5 pounds at $3 per unit

During the month, 5,000 pounds of raw materials were purchased.

<u>To calculate the direct material price variance, we need to use the following formula:</u>

Direct material price variance= (standard price - actual price)*actual quantity

Direct material price variance= (2 - 3)*5,000

Direct material price variance= $5,000 unfavorable

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