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Question - Bronco Chemical uses a standard cost system to account for the costs of its production of Chemical X. As per the standard cost card, standards for direct material and direct labor are:
Direct material: 2.9 gallons at $120 per gallon, and
Direct labor: 25 hours of labor at a standard wage rate of $27.
During September, Bronco produced 3,200 gallons of Chemical X. During September, Bronco purchased and used 3,720 gallons of direct material at a total cost of $450,180 and used 26,180 hours of direct labor for a total labor cost of $317,730.
Required - Calculate the direct materials price variance.
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