Majer Corporation makes a product with the following standard costs:
The company reported the following results concerning this product in February.
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
-The materials price variance for February is:
A) $3,136 F
B) $3,260 F
C) $3,136 U
D) $3,260 U

Question

Majer Corporation makes a product with the following standard costs:
  The company reported the following results concerning this product in February.
  The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
-The materials price variance for February is:
A) $3,136 F 
B) $3,260 F 
C) $3,136 U 
D) $3,260 U

Quizplus · Accepted Answer

Materials price variance = AQ × (AP − SP)
= 32,600 ounces × ($2.90 per ounce − $3.00 per ounce)
= 32,600 ounces × (−$0.10 per ounce)
= $3,260 F

Majer Corporation Makes a Product with the Following Standard Costs