A company developed the following perunit standards for its

A company developed the following per-unit standards for its product: 2 pounds of direct materials at $6 per pound. Last month, 1500 pounds of direct materials were purchased for $5700. The direct materials price variance for last month was

Solution

A. $3,300 favorable.

Direct materials price variance = (1,500 x $6) - $5,700 = $3,300 F