Asked by Potenza Building Mtrl on Apr 25, 2024
Verified
The following materials standards have been established for a particular product: 
The following data pertain to operations concerning the product for the last month:
What is the materials price variance for the month?
A) $3,000 Unfavorable
B) $9,350 Unfavorable
C) $9,000 Unfavorable
D) $16,280 Unfavorable
Materials Price Variance
The difference between the actual cost of direct materials used in production and the expected (budgeted) cost of those materials.
Materials Standards
Predetermined benchmarks for the cost and quantity of materials used in the production process.
- Assess and investigate the discrepancies in direct material pricing.
Verified Answer
CM
Charles McClaflin7 days ago
Final Answer :
B
Explanation :
To calculate the materials price variance, we use the formula: (actual price - standard price) x actual quantity purchased.
Actual price = $5.75 per pound
Standard price = $5.50 per pound
Actual quantity purchased = 350,000 pounds
Materials price variance = ($5.75 - $5.50) x 350,000 = $9,350 Unfavorable.
Actual price = $5.75 per pound
Standard price = $5.50 per pound
Actual quantity purchased = 350,000 pounds
Materials price variance = ($5.75 - $5.50) x 350,000 = $9,350 Unfavorable.
Learning Objectives
- Assess and investigate the discrepancies in direct material pricing.
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