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All Coronado Industries produces a product requiring 4 pounds of material costing $3.50 per pound. During December, All Coronado purchased 4700 pounds of material for $15792 and used the material to produce 500 products. What was the materials price variance for December

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Answer:

Direct material price variance= $658 favorable

Explanation:

Giving the following information:

Standard cost= $3.50 per pound.

During December, All Coronado purchased 4700 pounds of material for $15,792.

To calculate the direct material price variance, we need to use the following formula:

Direct material price variance= (standard price - actual price)*actual quantity

Actual price= 15,792/4,700= $3.36

Direct material price variance= (3.5 - 3.36)*4,700

Direct material price variance= $658 favorable

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