Question

Genent%E2%80%8B Industries, Inc.%E2%80%8B (GII), developed standard costs for direct material and direct labor. In%E2%80%8B 2017, GII estimated the following standard costs for one of their major%E2%80%8B products, the 30minus gallon heavy minus duty plastic container. Budgeted quantity Budgeted price Direct materials 0.4 pounds $ 10 per pound Direct labor 0.1 hours $ 14 per hour During%E2%80%8B July, GII produced and sold 3 comma 000 containers using 1 comma 300 pounds of direct materials at an average cost per pound of $ 7 and 375 direct manufacturing labor hours at an average wage of $ 14.40 per hour. The direct material price variance during July is%E2%80%8B ________.

Answer 1

Direct material price variance

= (Standard price - Actual price) x Actual quantity purchased

= ($10 - $7) x 1,300 pounds

= $3,900(F)

Step-by-step explanation:

Direct material price variance is the difference between standard price and actual price multiplied by actual quantity purchased.