Faas Marine Stores Company manufactures decorative fittings for luxury yachts which require highly skilled labor, and special metallic materials. Faas uses standard costs to prepare its flexible budget. For the first quarter of 2011, direct material and direct labor standards for one of their popular products were as follows: Materials: 1.5 pounds per unit; $4.00 per pound Labor: 2.0 hours per unit; $18.00 per hour During the first quarter, Faas produced 5,000 units of this product. At the end of the quarter, an examination of the materials records showed that the company used 7,000 pounds of materials and actual total material costs were $29,750. How much is the direct materials price variance? A. $2,000 F B. $2,020 F C. $1,640 U D. $1,750 U
Faas Marine Stores Company manufactures decorative fittings for luxury yachts which require highly skilled labor, and special metallic materials. Faas uses standard costs to prepare its flexible budget. For the first quarter of 2011, direct material and direct labor standards for one of their popular products were as follows: Materials: 1.5 pounds per unit; $4.00 per pound Labor: 2.0 hours per unit; $18.00 per hour During the first quarter, Faas produced 5,000 units of this product. At the end of the quarter, an examination of the materials records showed that the company used 7,000 pounds of materials and actual total material costs were $29,750. How much is the direct materials price variance? A. $2,000 F B. $2,020 F C. $1,640 U D. $1,750 U
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Faas Marine Stores Company manufactures decorative fittings for luxury
yachts which require highly skilled labor, and special metallic materials.
Faas uses standard costs to prepare its flexible budget. For the first
quarter of 2011, direct material and direct labor standards for one of their
popular products were as follows:
Materials: 1.5 pounds per unit; $4.00 per pound
Labor: 2.0 hours per unit; $18.00 per hour
During the first quarter, Faas produced 5,000 units of this product. At the
end of the quarter, an examination of the materials records showed that
the company used 7,000 pounds of materials and actual total material
costs were $29,750. How much is the direct materials price variance?
A. $2,000 F
B. $2,020 F
C. $1,640 U
D. $1,750 U
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