Degregorio Corporation makes a product that uses a material with the following direct material standards: The company produced 5, 600 units in November using 21, 750 kilos of the material.During the month, the company purchased 24, 800 kilos of the direct material at a total cost of $168, 640.The direct materials purchases variance is computed when the materials are purchased. The materials price variance for November is:

Question

Degregorio Corporation makes a product that uses a material with the following direct material standards:  The company produced 5, 600 units in November using 21, 750 kilos of the material.During the month, the company purchased 24, 800 kilos of the direct material at a total cost of $168, 640.The direct materials purchases variance is computed when the materials are purchased. The materials price variance for November is:

Quizplus · Accepted Answer

AQ × AP = $168, 640
Materials price variance = (AQ × AP)- (AQ × SP)
= ($168, 640)- (24, 800 kilos × $7.00 per kilo)
= $168, 640 - $173, 600
= $4, 960 F

Degregorio Corporation Makes a Product That Uses a Material with the Following