Question

8.3 lbs $19.15 per pound Standard quantity per unit of output Standard price The following data pertain to operations concerning the product for the last month Actual materials purchased Actual cost of materials purchased Actual materials used in production Actual output 9,000 lbs $171,000 7,100 lbs 700 units What is the purchase price variance of the materials for the month? $1,065.00 Favorable $1,350.00 Unfavorable А. В. С. $1,350.00 Favorable $1,065.00 Unfavorable D. Е. None of the above

Answer 1

Answer:

С. $1,350.00 Favorable

Explanation:

The computation of the material price variance is shown below:

= Actual Quantity × (Standard Price - Actual Price)

= 9,000 × ($19.15 - $171,000 ÷ 9,000)

= 9,000 × ($19.15 - $19)

= 9,000 × $0.15

= $1,350 favorable

The actual price is computed below:

= Actual cost of materials purchased ÷ Actual materials purchased

= $171,000 ÷ 9,000

= $19