#22 The following materials standards have been established for a particular pro
ID: 2476916 • Letter: #
Question
#22
The following materials standards have been established for a particular product:
Standard quantity per unit of output
8.4
meters
Standard price
$14.05
per meter
The following data pertain to operations concerning the product for the last month:
Actual materials purchased
6,000
meters
Actual cost of materials purchased
$72,000
Actual materials used in production
5,800
meters
Actual output
560
units
What is the materials price variance for the month?
a. $18,080 U
b. $13,152 U
c. $2,400 U
d. $12,300 F
Standard quantity per unit of output
8.4
meters
Standard price
$14.05
per meter
Explanation / Answer
Calculation of materials price variance:
Materials price variance = (Actual Price – Standard Price )*Actual Quantity
Actual Price = Actual cost of materials purchased / Actual materials purchased
= $72000 / 6000 Meters
= $12 Per Meter
Standard price = $14.05 Per Meter
Actual Quantity = Actual materials Purchased = 6000 Meters
Hence,
Materials price variance = (12 – 14.05 )*6000 =12300 Favorable
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