Question

The following standards have been established for a raw material used to make product O84: Standard quantity of the material per unit of output 7.6 meters Standard price of the material $ 18.80 per meter The following data pertain to a recent month's operations: Actual material purchased 3,900 meters Actual cost of material purchased $ 76,830 Actual material used in production 3,600 meters Actual output 550 units of product O84 The direct materials purchases variance is computed when the materials are purchased. Required: a. What is the materials price variance for the month

Answer 1

Answer:

The answer is "$\ 3,510 \ U$"

Explanation:

Calculating the materials price variance:

$= (AQ \times AP)\ ? \ (AQ \times SP)\\\\= \ 76,830 \ ? \ (3,900 \times \ 18.80) \\\\= \ 76,830 \ ? \ (\ 73,320) \\\\= \ 3,510 \ U$