The standard costs and actual costs for direct materials for the manufacture of 2,200 actual units of product are as follows: Standard Costs Direct materials 1,040 kilograms @$8.57 Actual Costs Direct materials 2,200 kilograms @ $8.35 The direct materials price variance is Da. $229 favorable Ob. $229 unfavorable Oc. $484 unfavorable Od. $484 favorable

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The standard costs and actual costs for direct materials for the manufacture of 2,200 actual units of product are as follows:
Standard Costs
Direct materials 1,040 kilograms @$8.57
Actual Costs
Direct materials 2,200 kilograms @ $8.35
The direct materials price variance is
Oa. $229 favorable
Ob. $229 unfavorable
Oc. $484 unfavorable
Od. $484 favorable
Transcribed Image Text:The standard costs and actual costs for direct materials for the manufacture of 2,200 actual units of product are as follows: Standard Costs Direct materials 1,040 kilograms @$8.57 Actual Costs Direct materials 2,200 kilograms @ $8.35 The direct materials price variance is Oa. $229 favorable Ob. $229 unfavorable Oc. $484 unfavorable Od. $484 favorable
Expert Solution
Step 1

Standard cost means the cost which the company is expecting to be incurred on the basis of estimate made earlier.

This standard is set and then compare with actual cost and remedial actions are taken.

Direct material cost has been further divided in price and quantity variance.

 

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