Orion Circuitry Ltd. developed the following per-unit standards for its product: 6 pounds of direct materials at $7.60 per pound. Last month, the company purchased 25,000 pounds of direct materials for $186,250, and 24,000 pounds were used in production. What is the Direct Materials Price Variance?

Orion Circuitry Ltd. developed the following per-unit standards for its product: 6 pounds of direct materials at $7.60 per pound. Last month, the company purchased 25,000 pounds of direct materials for $186,250, and 24,000 pounds were used in production. What is the Direct Materials Price Variance?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 5PA: Ed Co. manufactures two types of O rings, large and small. Both rings use the same material but...

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Question

Please provide the solution to this general accounting question using proper accounting principles.

Orion Circuitry Ltd. developed the following
per-unit standards for its product:
6 pounds of direct materials at $7.60 per
pound.
Last month, the company purchased 25,000
pounds of direct materials for $186,250, and
24,000 pounds were used in production.
What is the Direct Materials Price Variance?

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