Parallel Enterprises has collected the following data on one of its products. During the period the company produced 25,000 units. The direct materials price variance is: Direct materials standard (7 pounds @ $2.35/pound) $ 16.45 per finished unitActual cost of materials purchased $ 392,150 Actual direct materials purchased and used 157,000 pounds
Question
Parallel Enterprises has collected the following data on one of its products. During the period the company produced 25,000 units. The direct materials price variance is: Direct materials standard (7 pounds @ 16.45 per finished unitActual cost of materials purchased $ 392,150 Actual direct materials purchased and used 157,000 pounds
Solution
The question seems to be incomplete. However, based on the provided information, I can guide you on how to calculate the direct materials price variance.
The direct materials price variance is calculated as follows:
Direct materials price variance = (Actual Quantity * Standard Price) - (Actual Quantity * Actual Price)
From the data provided:
- The standard price per pound is $2.35
- The actual quantity of direct materials purchased and used is 157,000 pounds
- The actual cost of materials purchased is 392,150 / 157,000 = $2.50 approximately.
Now, we can substitute these values into the formula:
Direct materials price variance = (157,000 * 2.50)
Please calculate the above expression to get the direct materials price variance.
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