Knowee
Questions
Features
Study Tools

Multiple Choice QuestionABC Company has set the following standards for one unit of product: Direct materials: 0.5 pounds @ $1.00 per pound; Direct labor: 1 hour @ $10.00 per hour. The company produced 35,000 units and had the following actual costs: Direct materials: 18,000 pounds at a total cost of $17,280; Direct labor: 36,000 hours at a total cost of $374,400. Compute the direct materials price variance.Multiple choice question.$500 U$720 U$500 F$720 F

Question

Multiple Choice QuestionABC Company has set the following standards for one unit of product: Direct materials: 0.5 pounds @ 1.00perpound;Directlabor:1hour@1.00 per pound; Direct labor: 1 hour @ 10.00 per hour. The company produced 35,000 units and had the following actual costs: Direct materials: 18,000 pounds at a total cost of 17,280;Directlabor:36,000hoursatatotalcostof17,280; Direct labor: 36,000 hours at a total cost of 374,400. Compute the direct materials price variance.Multiple choice question.500U500 U720 U500F500 F720 F

...expand
🧐 Not the exact question you are looking for?Go ask a question

Solution

The direct materials price variance is calculated as follows:

First, calculate the standard cost per unit of direct materials: 0.5 pounds * 1.00perpound=1.00 per pound = 0.50 per unit.

Next, calculate the actual cost per unit of direct materials: 17,280/18,000pounds=17,280 / 18,000 pounds = 0.96 per pound.

Then, calculate the price variance: (Standard price - Actual price) * Actual quantity = (1.00−1.00 - 0.96) * 18,000 pounds = $720 F.

So, the correct answer is $720 F.

This problem has been solved

Similar Questions

ABC Company has set the following standards for one unit of product: Direct materials: 0.5 pounds @ $1.00 per pound; Direct labor: 1 hour @ $10.00 per hour. The company produced 35,000 units and had the following actual costs: Direct materials: 18,000 pounds at a total cost of $17,280; Direct labor: 36,000 hours at a total cost of $374,400. Compute the direct materials price variance.Multiple choice question.$720 U$500 F$500 U$720 F

Given the following information, calculate the direct material efficiency variance.  Actual production in units17,000Standard cost for materials per unit$0.75 per pound × 3 poundsActual cost for materials$36,750 for 52,500 pounds Multiple choice question.$1,050 favorable$1,125 unfavorable$1,125 favorable$1,050 unfavorable

Multiple Choice QuestionXYZ Company makes one product and has calculated the following amounts for direct labor: AH x AR = $84,000; AH x SR = $83,000; SH x SR = $85,000. Compute the direct labor cost variance.Multiple choice question.$2,000 U$1,000 U$2,000 F$1,000 F

XYZ Company makes one product and has calculated the following amounts for direct materials: Actual cost: AQ x AP = $150,000; AQ x SP = $145,000; Standard cost: SQ x SP = $152,000. Compute the direct materials variance.Multiple choice question.$7,000 F$2,000 F$5,000 U$2,000 U

Given the following information, calculate the direct labor price variance.  Actual production in units17,000Standard labor cost per unit1/2 hour @ $20 per hourActual cost for labor$216,750 for 12,750 hoursMultiple choice question.$72,750 unfavorable$38,250 unfavorable$72,750 favorable$38,250 favorable

1/1

Upgrade your grade with Knowee

Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.