A company uses the following standard costs to produce a single unit of output. Direct materials 5 pounds at $1.00 per pound - Direct labor 0.4 hour at $10.00 per hour - Manufacturing overhead 0.4 hour at $3.00 per hour = During the latest month, the company purchased and used 46,000 pounds of direct materials at a price of $1.10 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $36,375 based on 3,750 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $8,000 and fixed manufacturing overhead incurred was $10,000. Based on this information, the direct materials price variance for the month was: Multiple Choice O O $4,000 unfavorable $5.00 $4.00 $ 1.20 $8,600 favorable
A company uses the following standard costs to produce a single unit of output. Direct materials 5 pounds at $1.00 per pound - Direct labor 0.4 hour at $10.00 per hour - Manufacturing overhead 0.4 hour at $3.00 per hour = During the latest month, the company purchased and used 46,000 pounds of direct materials at a price of $1.10 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $36,375 based on 3,750 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $8,000 and fixed manufacturing overhead incurred was $10,000. Based on this information, the direct materials price variance for the month was: Multiple Choice O O $4,000 unfavorable $5.00 $4.00 $ 1.20 $8,600 favorable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject : Accounting
Transcribed Image Text:A company uses the following standard costs to produce a single unit of output.
Direct materials
5 pounds at $1.00 per pound =
Direct labor
0.4 hour at $10.00 per hour -
Manufacturing overhead 0.4 hour at $3.00 per hour =
During the latest month, the company purchased and used 46,000 pounds of direct materials at a price of $1.10 per pound to produce 10,000
units of output. Direct labor costs for the month totaled $36,375 based on 3,750 direct labor hours worked. Variable manufacturing overhead
costs incurred totaled $8,000 and fixed manufacturing overhead incurred was $10,000. Based on this information, the direct materials price
variance for the month was:
Multiple Choice
O
O
$4,000 unfavorable
$5.00
$4.00
$ 1.20
$8,600 favorable
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