Business: For the year 2018, a company provides the following information: amount 4,000 30,000 description budgeted output budgeted raw materials to be used in pounds) budgeted raw materials price per pound budgeted labor rate per hour budgeted labor hours $0.20 $15.00 2,000 actual output actual raw materials used in pounds) 4,200 32,000 actual raw materials price per pound actual labor rate per hour actual labor hours $0.18 $14.50 2.050 compute the direct materials price variance. a. the direct materials

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For the year 2018, a company provides the following - id20181723618, savannadutton8577

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16.03.2022

c. The direct materials price variance is $640 (Favorable)

Explanation:

Provided, budgeted and actual information we have,

Direct Material Price Variance = (Standard Price - Actual Price) $\times$ Actual Quantity.

Given standard price per unit = $0.20

Actual price per unit = $0.18

Actual Quantity = 32,000 pounds

Variance = ($0.20 - $0.18) $\times$ 32,000 = $640 Favorable as the actual price is less than budgeted price.

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