The following materials standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: The direct materials purchases variance is computed when the materials are purchased. What is the materials price variance for the month?

Question

The following materials standards have been established for a particular product:  The following data pertain to operations concerning the product for the last month:  The direct materials purchases variance is computed when the materials are purchased. What is the materials price variance for the month?

Quizplus · Accepted Answer

AQ × AP = $108, 460
Materials price variance = (AQ × AP)- (AQ × SP)
= ($108, 460)- (5, 800 grams × $18.00 per gram)
= $108, 460 - $104, 400
= $4, 060 U

The Following Materials Standards Have Been Established for a Particular