Answered: Myers Corporation has the following…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 1BE: Direct materials variances Bellingham Company produces a product that requires 2.5 standard pounds...

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Question

Myers Corporation has the following data related to direct materials costs for November: actual costs for 4,700 pounds of material at $5.30 per pound; and standard costs for 4,410 pounds of material at $6.20 per pound.

What is the direct materials price variance?

a. $4,230 favorable

b. $1,798 favorable

c. $1,798 unfavorable

d. $4,230 unfavorable

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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