The following actual and standard cost data for direct material and direct labor relate to the production of 4,000 units of product: Actual CostsStandard CostsDirect Material6,200 lb. @ $3.906,000 lb. @ $4.00Direct Labor4,300 hrs. @ $14.704,000 hrs. @ $15.00 Determine the materials price variance Select one:a. $620 Fb. $620 Uc. $180 Fd. $180 Ue. None of the above

Materials price variance is the difference between the actual price and standard price of the actual…

Answered: The following actual and standard cost…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 3PA: Direct materials, direct labor, and factory overhead cost variance analysis Mackinaw Inc. processes...

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The following actual and standard cost data for direct material and direct labor relate to the production of 4,000 units of product:

	Actual Costs	Standard Costs
Direct Material	6,200 lb. @ $3.90	6,000 lb. @ $4.00
Direct Labor	4,300 hrs. @ $14.70	4,000 hrs. @ $15.00

Determine the materials price variance

Select one:

a. $620 F

b. $620 U

c. $180 F

d. $180 U

e. None of the above

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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