Question

Milar Corporation makes a product with the following standard costs: Direct materials 7.7 pounds at $4.00 per pound. The materials price variance for January is: A) $30.80 favorable B) $30.80 unfavorable C) $7.70 favorable D) $7.70 unfavorable

Answer 1

The correct answer is B. $39,100 favorable.

Given that -

Actual Quantity = 6,800 pounds

Actual Price = $50.25

Standard Price = $56

The direct materials price variance can be calculated as under -

As the actual price is lower than the standard price, the direct materials price variance is favorable

sorry bit that's a way to calculate your answer