Melrose Corporation makes a product that uses a material with the following standards: The company budgeted for production of 5, 800 units in September, but actual production was 5, 900 units.The company used 50, 210 pounds of direct material to produce this output.The company purchased 55, 100 pounds of the direct material at $5.80 per pound. The direct materials purchases variance is computed when the materials are purchased.
The materials price variance for September is:

Question

Melrose Corporation makes a product that uses a material with the following standards:  The company budgeted for production of 5, 800 units in September, but actual production was 5, 900 units.The company used 50, 210 pounds of direct material to produce this output.The company purchased 55, 100 pounds of the direct material at $5.80 per pound. The direct materials purchases variance is computed when the materials are purchased.
The materials price variance for September is:

Quizplus · Accepted Answer

Materials price variance = AQ × (AP - SP)
= 55, 100 pounds × ($5.80 per pound - $6.00 per pound)
= 55, 100 pounds × (-$0.20 per pound)
= $11, 020 F

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