Ultimate Production manufactures radon detectors. The standards for materials for each detector is 2 pounds of acrylic at a standard cost of $4.30 per pound. During May, the company purchased 890 pounds and used 830 pounds of acrylic and made 410 radon detectors. The company paid $4.45 per pound for the acrylic. There were 400 detectors budgeted for May. How much is the material price variance?

Question

Quizplus · Accepted Answer

The material price variance is calculated as (Actual Price - Standard Price) x Actual Quantity Purchased. Here, it is ($4.45 - $4.30) x 890 = $134 unfavorable.

Ultimate Production Manufactures Radon Detectors