Milar Corporation manufactures a product with the following standard costs:

	Standard Quantity or Hours			Standard Price or Rate
Direct materials		2.0	pounds	ps	7.00	per pound
Direct labour		1.6	hours	ps	14.00	per hour
Variable Overhead		1.6	hours	ps	2.00	per hour

In January, the company produced 4,600 units using 10,220 pounds of direct material and 2,200 direct labor hours. During the month, the company purchased 10,790 pounds of direct material at a cost of $76,670. The actual direct labor cost was $38,246 and the actual variable overhead cost was $11,947.

The company applies variable overhead on the basis of direct labor hours. The direct materials purchase variance is calculated when the materials are purchased.

Calculate the variation in the price of materials for January.

Answer rating: 100% (QA)

The direct materials purchase variance for January is 4470 favorable Standard quanti... View the full answer