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16 March, 01:05

All Coronado Industries produces a product requiring 4 pounds of material costing $3.50 per pound. During December, All Coronado purchased 4700 pounds of material for $15792 and used the material to produce 500 products. What was the materials price variance for December

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  1. 16 March, 01:40
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    Direct material price variance = $658 favorable

    Explanation:

    Giving the following information:

    Standard cost = $3.50 per pound.

    During December, All Coronado purchased 4700 pounds of material for $15,792.

    To calculate the direct material price variance, we need to use the following formula:

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

    Actual price = 15,792/4,700 = $3.36

    Direct material price variance = (3.5 - 3.36) * 4,700

    Direct material price variance = $658 favorable
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