Edgar Inc. has a materials price standard of $2.00 per pound. Six thousand pounds of materials were purchased at $2.20 a pound. The actual quantity of materials used was 6000 pounds although the standard quantity allowed for the output was 5400 pounds. Edgar Inc.'s total materials variance is

Question

Quizplus · Accepted Answer

The total materials variance is calculated as (Actual Quantity x Actual Price) - (Standard Quantity x Standard Price). Here, (6000 x $2.20) - (5400 x $2.00) = $13,200 - $10,800 = $2,400 Unfavorable (U).

Edgar Inc Has a Materials Price Standard of $2