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6 July, 11:42

The standard costs and actual costs for direct materials for the manufacture of 2,200 actual units of product are as follows: Standard Costs Direct materials 1,040 kilograms at $8.96 Actual Costs Direct materials 2,200 kilograms at $8.00 The direct materials price variance is a.$998 favorable b.$2,112 favorable c.$998 unfavorable d.$2,112 unfavorable

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  1. 6 July, 12:29
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    b. 2,112 Favorable

    Explanation:

    Given that

    Actual Quantity = 2,200

    Standard Price = $8.96

    Actual Price = $8

    The computation of direct price variance is given below:-

    = Actual Quantity * (Standard Price - Actual Price)

    = 2,200 * ($8.96 - $8)

    = 2,200 * (0.96)

    = 2,112 Favorable

    So, the standard price is higher that actual price, so the direct price variance will be favorable.
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