A company uses the following standard costs to produce a single unit of output. Direct materials Direct labor Manufacturing overhead 7 pounds at $0.80 per pound 0.4 hour at $8.00 per hour 0.4 hour at $5.00 per hour During the latest month, the company purchased and used 67,000 pounds of direct materials at a price of $0.90 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $28,952 based on 3,760 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $17,000 and fixed manufacturing overhead incurred was $10,000. Based on this, information, the direct materials price variance for the month was: Multiple Choice $3,200 unfavorable $4,300 favorable $1,000 favorable $4,300 unfavorable $ 5.60 $ 3.20 $ 2.00 $6,700 unfavorable

A company uses the following standard costs to produce a single unit of output. Direct materials Direct labor Manufacturing overhead 7 pounds at $0.80 per pound 0.4 hour at $8.00 per hour 0.4 hour at $5.00 per hour During the latest month, the company purchased and used 67,000 pounds of direct materials at a price of $0.90 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $28,952 based on 3,760 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $17,000 and fixed manufacturing overhead incurred was $10,000. Based on this, information, the direct materials price variance for the month was: Multiple Choice $3,200 unfavorable $4,300 favorable $1,000 favorable $4,300 unfavorable $ 5.60 $ 3.20 $ 2.00 $6,700 unfavorable

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Description: A company uses the following standard costs to produce a single unit of output.Direct materialsDirect laborManufacturing overhead7 pounds at $0.80 per pound0.4 hour at $8.00 per hour0.4 hour at $5.00 per hourDuring the latest month, the company purc

FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Question

A company uses the following standard costs to produce a single unit of output.
Direct materials
Direct labor
Manufacturing overhead
7 pounds at $0.80 per pound
0.4 hour at $8.00 per hour
0.4 hour at $5.00 per hour
During the latest month, the company purchased and used 67,000 pounds of direct materials at a price of $0.90 per
pound to produce 10,000 units of output. Direct labor costs for the month totaled $28,952 based on 3,760 direct
labor hours worked. Variable manufacturing overhead costs incurred totaled $17,000 and fixed manufacturing
overhead incurred was $10,000. Based on this, information, the direct materials price variance for the month was:
Multiple Choice
$3,200 unfavorable.
$4,300 favorable
$1,000 favorable
$4,300 unfavorable
$ 5.60
$ 3.20
$ 2.00
$6,700 unfavorable

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