Figure 17-3
Tuvok Ltd. has developed the following standards for one of its products: $\begin{array}{ll}
\text { Standard cost of materials } & £ 0.50 \text { per pound } \
\text { Materials purchased and used } & 20,000 \text { pounds } \
\text { Total paid to suppliers } & £ 11,000 \
\text { Standard quantity allowed } & 18,000 \text { pounds }
\end{array}$
-Refer to Figure 17-3. Tuvok's material price variance is
A)£1,000 unfavourable.
B)£2,000 unfavourable.
C)£1,100 unfavourable.
D)cannot be computed from the information given.

Question

Quizplus · Accepted Answer

The material price variance is calculated as (Actual Price - Standard Price) x Actual Quantity. Here, the actual price is £11,000/20,000 pounds = £0.55 per pound. The standard price is £0.50 per pound. The variance is (£0.55 - £0.50) x 20,000 = £1,000 unfavourable.

Figure 17-3 Tuvok Ltd -Refer to Figure 17-3

Figure 17-3
Tuvok Ltd -Refer to Figure 17-3