Compound K52E is a raw material used to make Pinkos Corporation's major product.The standard cost of compound K52E is $46.00 per ounce and the standard quantity is 5.0 ounces per unit of output.Data concerning the compound for March appear below: The raw material was purchased on account. The Materials Price Variance for March would be recorded as a:
A)Debit of $2,220
B)Debit of $2,142
C)Credit of $2,220
D)Credit of $2,142

Question

Compound K52E is a raw material used to make Pinkos Corporation's major product.The standard cost of compound K52E is $46.00 per ounce and the standard quantity is 5.0 ounces per unit of output.Data concerning the compound for March appear below:  The raw material was purchased on account. The Materials Price Variance for March would be recorded as a:
A)Debit of $2,220 
B)Debit of $2,142 
C)Credit of $2,220 
D)Credit of $2,142

Quizplus · Accepted Answer

Materials price variance = AQ × (AP - SP)
= 3,700 ounces × ($46.60 per ounce - $46.00 per ounce)
= 3,700 ounces × ($0.60 per ounce)
= $2,220 U
An unfavorable variance is debite

Compound K52E Is a Raw Material Used to Make Pinkos