Mover Company has developed the following standards for one of its products: The following activity occurred during March:
The company records materials price variances at the time of purchase.The variable standard cost per unit for materials and labor is
A)$98.
B)$84.
C)$74.
D)$38.

Question

Mover Company has developed the following standards for one of its products:  The following activity occurred during March:
 The company records materials price variances at the time of purchase.The variable standard cost per unit for materials and labor is
A)$98. 
B)$84. 
C)$74. 
D)$38.

Quizplus · Accepted Answer

To calculate the materials price variance, we need to compare the actual price paid for materials to the standard price for materials. The actual price paid for materials is given as $15 per unit.

To find the standard price for materials, we can refer to the given standard cost per unit, which is $84. This includes both materials and labor costs, so we need to subtract the variable standard cost per unit for labor, which is $44, to find the variable standard cost per unit for materials.

Variable standard cost per unit for materials = $84 - $44 = $40
Thus, the standard price for materials is $40 per unit.

Now we can calculate the materials price variance:

Materials price variance = (actual price - standard price) x actual quantity purchased 
= ($15 - $40) x 3,200 
= -$75 x 3,200 
= -$240,000

Since the materials price variance is negative, it means that the actual price paid for materials was lower than the standard price. The answer is therefore B, $84.

Mover Company Has Developed the Following Standards for One of Its