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8,400 pounds of material are actually used at an actual price of $6.30 per pound. What is the total actual direct materials cost?
A$51,600
B$50,400
C$54,180
D$52,920
Answer & Solution
Correct answer: D. $52,920
1. Total actual cost is actual quantity multiplied by actual price.
2. 8,400 pounds times $6.30 gives $52,920.
3. Standard cost for comparison is 8,600 pounds times $6.00, which is $51,600.
4. The total cost variance is $52,920 minus $51,600, which is $1,320 unfavourable.
_Source: Jonick, Principles of Managerial Accounting (UNG Press, CC BY-SA 4.0), section 8.2 Direct Materials Cost Variance_
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