Oxford Company has a materials standard of 2.1 pounds per unit of output. Each pound has a standard price of $14 per pound. During February, Oxford Company paid $75,600 for 5,040 pounds at $15 per pound, which were used to produce 2,600 units of product. What is the direct materials price variance? Multiple Choice $2,600 unfavorable $2,800 favorable $5,040 unfavorable $5,240 favorable
Oxford Company has a materials standard of 2.1 pounds per unit of output. Each pound has a standard price of $14 per pound. During February, Oxford Company paid $75,600 for 5,040 pounds at $15 per pound, which were used to produce 2,600 units of product. What is the direct materials price variance? Multiple Choice $2,600 unfavorable $2,800 favorable $5,040 unfavorable $5,240 favorable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Oxford Company has a materials standard of 2.1 pounds per unit of output. Each pound has a standard price of $14
per pound. During February, Oxford Company paid $75,600 for 5,040 pounds at $15 per pound, which were used to
produce 2,600 units of product. What is the direct materials price variance?
Multiple Choice
$2,600 unfavorable
$2,800 favorable
$5,040 unfavorable
$5,240 favorable
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