Reference no: EM131719166

Question - Accelerator, Inc. manufactures a fuel additive called surge. The company produces and sells 87,000 containers of surge each month. The company has established the following standards for each container of surge produced:

                    standard quantity              standard price

direct materials        7 gallons                  $4.00 per gallon

direct labor            2.50 hours                 $14.00 per hour

The following information is available for surge for the month of May:

1. 650,000 gallons of chemicals were purchased at a cost of $2,522,000. At May 31, Accelerator, Inc. had 30,000 gallons of chemical available in the storeroom.

2. 215,000 direct labor hours were worked during May at a total cost of $3,096,000.

Calculate the direct material price variance for May. If the variance is unfavorable, enter a U after your number with a space between the number and the U (i.e., 10,000 U). If the variance is favorable, enter an F after your number with a space between the number and the F (i.e., 10,000 F).

Do not use decimals or a minus sign in your answer.