Casivant Corporation makes a product that uses a material with the following dir

Question

Casivant Corporation makes a product that uses a material with the following direct material standards:

Standard quantity

3.8

pounds per unit

Standard price

$

4.00

per pound

The company produced 7,300 units in November using 28,710 pounds of the material. During the month, the company purchased 30,800 pounds of the direct material at a total cost of $117,040. The direct materials purchases variance is computed when the materials are purchased.

The materials price variance for November is:

A) $5,548 U

B) $6,160 U

C) $6,160 F

D) $5,548 F

Standard quantity

3.8

pounds per unit

Standard price

$

4.00

per pound

Explanation / Answer

C) $6,160 F

AQ × AP = $117,040

Materials price variance = (AQ × AP) ? (AQ × SP)

= ($117,040) ? (30,800 × $4.00)

= $6,160 F

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