Willow Inc has provided the following information Standards Per unit Direct materials 10 lb $3 60 lb $ 36 00 Direct labor 2 hours $24 50 hour 49 00 Variable overhead 2 hours $18 hour 36 00 Fixed overhead 20 00 Total $ 141 00 Budgeted production 7,400 units Actual results Materials 76,460 lbs $ 273,451 Direct labor 14,450 actual hours $ 345,230 Variable overhead $ 266,640 Fixed overhead $ 144,870 Units produced 7,500 units a Calculate the direct materials price variance (Do not round your intermediate calculations Indicate the effect of variance by selecting Favorable , Unfavorable , or None for no effect (i e , zero variance) )

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Question: Willow Inc. has provided the following information: Standards: Per unit Direct materials 10 lb @ $3.60/lb $ 36.00 Direct labor 2 hours @ $24.50/hour 49.00

Willow Inc. has provided the following information:

Standards:		Per unit
Direct materials	10 lb @ $3.60/lb	$	36.00
Direct labor	2 hours @ $24.50/hour		49.00
Variable overhead	2 hours @ $18/hour		36.00
Fixed overhead			20.00
Total		$	141.00

Budgeted production = 7,400 units

Actual results
Materials	76,460	lbs	$	273,451
Direct labor	14,450	actual hours	$	345,230
Variable overhead			$	266,640
Fixed overhead			$	144,870
Units produced	7,500	units

a. Calculate the direct materials price variance. (Do not round your intermediate calculations. Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance).)

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