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Problem 1: The Porter Company has a standard cost system. In July, the company purchased 22,500 kilograms of direct material at an actual cost of $52,000. 21,000 kilograms were used in producing 50 units of finished goods. The DM price standard is $2.50 per kilogram and the DM quantity standard is 435 kilograms. What was the materials price variance for July?
Multiple Choice
Option 1: $4,250 unfavourable. Option 2: $3,250 unfavourable. Option 3: $3,250 favourable. Option 4: $4,250 favourable.
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