The standard direct material cost to produce one widget is four meters of widget line (material) at $3.00 per meter.

Question

486 viewsNovember 21, 2016

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Darshita 6.14K November 21, 2016 0 Comments

The standard direct material cost to produce one widget is four meters of widget line (material) at $3.00 per meter. Durig May 2016, 6,000 meters of line (material) costing $17,500 were purchased and used to produce 1,500 units of widgets. What was the material price variance for May 2016?

a. $200 Favorable

b. $500 Unfavorable

c. $800 Unfavorable

d. $500 Favorable

1 Answer

score 0 · Answer 1 · 2016-11-21T04:40:48+00:00

$500 Favorable

Working notes for the above answer is as under

material price variance

=( AQ*AP) – (AQ*SP)

now we put the figures in to the formulla as follow

=17500 – (6000*3)

=17500- 18000

=500 F

1 Answer

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