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

Question

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

Quizplus · Accepted Answer

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.

The Following Materials Standards Have Been Established for a Particular