Welch Company Budgeted the Following Cost Standards for the Current $= 1.40$

question 15

Multiple Choice

Welch Company budgeted the following cost standards for the current year: Direct materials $= 1.40$ kilograms per unit $@\$ 1.50$ per kilogram
Direct labour $= 0.75$ hours per unit $@ \$ 6$ per hour
Actual production and costs were as follows:
Units produced $= 2,800$
Direct materials used $= 4,500 \mathrm {~kg}$
Direct materials purchased $= 5,000 \mathrm {~kg}@$ a cost of $\$ 5,850$
Direct labour incurred $= 2,000$ hours at a cost of $\$ 13,000$ The material price variance for materials purchased was:

• A) $1,650 F
• B) $870 U
• C) $2,520 U
• D) $780 F

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