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What is the direct materials price variance

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Question - Robin's Ribbons makes giant bows for customers to put on new cars. The following is information regarding standard costs for Robin's Ribbons.

Direct Materials (15 yards of ribbon @ $1.30 per yard) $19.50

Direct Labor (1.5 hours @ $10/hour) 15.00

Variable Manufacturing Overhead (1.5 hours @ $0.60/hour) 0.90

Total Standard Variable Cost per unit $35.40

During December 2020, Robin's Ribbons sells 200 giant bows. Actual costs incurred in making the bows are as follows:

Materials Purchased: 3,200 yards @ $1.20/yard $3,840

Materials Used: 2,960 yards

Direct Labor: 280 hours @ $12/hour 3,360

Variable Manufacturing Overhead: 154

Required - What is the Direct Materials Price Variance?

A. $320 Favorable

B. $296 Unfavorable

C. $296 Favorable

D. $320 Favorable

Reference no: EM132967955

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