Cima C01 Exam Question No 27

Question No 27:

X operates a standard marginal costing system. The following budgeted and standard cost information is available:

• Budgeted production and sales          10,000 units
• Direct material cost –                         3 kg x $10 $30 per unit

Actual results for the period were as follows:

• Production and sales                           11,500 units
• Direct material –                                 36,000 kg $342,000

The direct material price variance is

A. $18,000 adverse
B. $3,000 adverse
C. $3,000 favourable
D. $18,000 favourable

Answer: D