Respuesta :
The direct materials price variance is: $400
How to calculate the direct materials price variance ?
As per the question:
- Standard quantity allowed (SQ) = 5,000 pounds (1,000 units × 5 Pounds)
- Standard price (SP) = $2 per pound
- Units produced = 1,000 units
- Actual quantity (AQ) = 5,200 pounds
The following formula helps determine the direct materials quantity variance:
Direct materials quantity variance = (SQ - AQ) × SP
Direct materials quantity variance = (5,000 pounds - 5,200 pounds) * $2
Direct materials quantity variance = $400
The variance is unfavorable as the actual quantity used is more than the standard quantity allowed for actual production.
Direct materials price variance :
The direct material price variance in variance analysis is the difference between the standard cost and the actual cost for the actual quantity of material purchased. It is one of two components of total direct material variance. The direct material variance is made up of two additional variances, which are listed below. It is customary to calculate and report these two variances separately so that management can determine whether the variances are the result of purchasing or manufacturing issues.
The purchase price variance is calculated as the difference between the standard and actual cost per unit of direct materials purchased, multiplied by the standard number of units expected to be used in the manufacturing process. The purchasing department is in charge of this variation. The material yield variance is the difference between the standard and actual number of units used in the production process, multiplied by the standard cost per unit. This variance is the responsibility of the production department.
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The direct materials price variance is $400
What is Direct material price variance ?
The discrepancy between the anticipated and actual costs associated with procuring direct materials is referred to as the "direct material price variation" (DM Price Variance). It assesses how much the standard price has been applied excessively or inadequately to various buying units.
To solve the question :
Given,
Standard quantity allowed (SQ) = 5,000 pounds (1,000 units × 5 Pounds)
Standard price (SP) = $2 per pound
Units produced = 1,000 units
Actual quantity (AQ) = 5,200 pounds
The following formula helps determine the direct materials quantity variance:
Direct materials quantity variance
= (SQ - AQ) × SP
= (5,000 pounds - 5,200 pounds) * $2
= $400
The variance is unfavourable as the actual quantity used is more than the standard quantity allowed for actual production.
To know more about direct materials price variance, visit :
https://brainly.com/question/16045787
