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A company developed the following per-unit standards for its product: 2 gallons of direct materials at $8 per gallon. Last month, 3,000 gallons of direct materials were purchased for $22,800. The direct materials price variance for last month was ___________.

Respuesta :

Answer:

$1,200 favorable

Explanation:

The computation of the  direct material price variance is shown below:

= Actual Quantity × (Standard Price - Actual Price)

= 3,000 gallons × ($8 - $22,800 ÷ 3,000 gallons)

= 3,000 gallons × ($8 - $7.6)

= 3,000 gallons × $0.4

= $1,200 favorable

The actual price is computed below:

= $22,800 ÷ 3,000 gallons

= $7.6

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