A company purchases 15,000 pounds of materials. The materials price variance is $6,000 favorable. What is the difference between the standard and actual price paid for the materials?

Question

Quizplus · Accepted Answer

The materials price variance is calculated as (Actual Price - Standard Price) x Actual Quantity. Given a $6,000 favorable variance and 15,000 pounds, the difference is $6,000 / 15,000 = $0.40 per pound.

A Company Purchases 15,000 Pounds of Materials