Standard Gears produces lawn mower gears. It uses units as the cost driver for overhead. The following information was provided concerning its standard cost system:
| Actual Data |
|
Budgeted and Standard Data |
| Produced |
12,400 units |
| Materials purchased |
4,650 lbs. for a total cost of $32,550 |
| Materials used |
4,700 lbs. |
| Labor worked |
7,460 hrs. costing $79,822 |
| Actual overhead |
Fixed: $84,800 Variable $36,100 |
|
|
| Budgeted units |
12,500 units |
| Budgeted materials |
0.40 lb. @ $7.10 per lb. |
| Budgeted labor |
36 minutes @ $11.00 per hour |
| Budgeted variable overhead |
$35,625 |
| Budgeted fixed overhead |
$85,500 |
|
How much is the direct material price variance?