Last month 75,000 grams of direct material were purchased and 71,000 grams were used.If the actual purchase price per gram was $0.50 more than the standard purchase price per gram,then the material price variance was?

Question

Quizplus · Accepted Answer

Standard cost of direct material per gram = purchase price per gram
Let the standard purchase price per gram = x
Then, actual purchase price per gram = x + $0.50
Quantity purchased = 75,000 grams
Quantity used = 71,000 grams
So, the actual cost of direct material used = 71,000 * (x + $0.50)
The standard cost of direct material allowed = 71,000 * x
Material price variance = Actual cost of direct material used - Standard cost of direct material allowed
= (71,000 * (x + $0.50)) - (71,000 * x)
= $35,500 U
Therefore, the correct choice is C.

Last Month 75,000 Grams of Direct Material Were Purchased and 71,000