Blue Lite manufactures decorative weather vanes that have a standard materials cost of two pounds of raw materials at $2 per pound. During November 500 pounds of raw materials costing $4 per pound were used in making 450 weather vanes.
The materials price and quantity variance are:
A) Material Price Variance 1,000 F, Material Quantity variance 800 F
B) Material Price Variance 1,000 U, Material Quantity variance 800 F
C) Material Price Variance 500 F, Material Quantity variance 400 U
D) Material Price Variance 500 U, Material Quantity variance 400 F

Question

Quizplus · Accepted Answer

Materials price variance = AQ used (AP F1F1F1S1?F1F1F10 SP)
= 500 lbs. × ($4 F1F1F1S1?F1F1F10 $2)
= 500 lbs. × $2
= $1,000 U
Materials quantity variance = SP × (AQ used F1F1F1S1?F1F1F10 SQ)
= $2 × [500 F1F1F1S1?F1F1F10 (450 × 2)]
= $2 × (500 F1F1F1S1?F1F1F10 900)
= $800 F

Blue Lite Manufactures Decorative Weather Vanes That Have a Standard