Ortman Corporation makes a product with the following standard costs: The company reported the following results concerning this product in May. 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 May is:

Question

Ortman Corporation makes a product with the following standard costs:  The company reported the following results concerning this product in May.  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 May is:

Quizplus · Accepted Answer

Materials price variance = AQ × (AP - SP)
= 14, 000 liters × ($8.10 per liter - $8.00 per liter)
= 14, 000 liters × ($0.10 per liter)
= $1, 400 U

Ortman Corporation Makes a Product with the Following Standard Costs