If a company purchases raw materials on account for $19830 when the standard cost is $18900 it will
A) debit Materials Price Variance for $930.
B) credit Materials Price Variance for $930.
C) debit Materials Quantity Variance for $930.
D) credit Material Quantity Variance for $930.

Question

Quizplus · Accepted Answer

Material Price Variance is the difference between the actual cost of materials purchased and the standard cost. Since the company purchased materials on account for $930 more than the standard cost, the variance is unfavorable and should be debited to Materials Price Variance.

If a Company Purchases Raw Materials on Account for $19830