Asked by Brooke Thompson on May 21, 2024

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The total direct materials cost variance is

A) $9,262.50 unfavorable
B) $9,262.50 favorable
C) $3,780.00 unfavorable
D) $3,562.50 favorable

Direct Materials Cost Variance

The difference between the budgeted cost of materials and the actual cost used in production.

Materials Cost

The expense incurred for the raw materials that are used in the production of goods or services.

Yards Per Unit

A measurement used to indicate the amount of yardage (length in yards) of material required or utilized per unit of production.

  • Recognize and compute variances in direct materials, encompassing both price and quantity discrepancies.
  • Utilize conventional cost systems for the analysis and effective management of production expenses.
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CR
Christal RhodemanMay 23, 2024
Final Answer :
A
Explanation :
The total direct materials cost variance is calculated by comparing the standard cost of materials to the actual cost incurred. The standard cost for the materials needed for production is calculated as (standard cost per yard) * (standard yards per unit) * (units of production) = $2.00 * 4.5 yards * 9,500 units = $85,500. The actual cost incurred is (actual cost per yard) * (actual yards per unit) * (units of production) = $2.10 * 4.75 yards * 9,500 units = $94,762.50. The variance is $94,762.50 - $85,500 = $9,262.50 unfavorable, because the actual cost exceeds the standard cost.