Hazelton Company Hazelton Company has the following information available for December when 3,500 units were produced (round answers to the nearest dollar).
Refer to Hazleton Company.Assume that the company computes the material price variance on the basis of material issued to production.What is the total material variance?
A)$2,850 U
B)$2,850 F
C)$5,188 U
D)$5,188 F

Question

Hazelton Company Hazelton Company has the following information available for December when 3,500 units were produced (round answers to the nearest dollar).
 Refer to Hazleton Company.Assume that the company computes the material price variance on the basis of material issued to production.What is the total material variance?
A)$2,850 U 
B)$2,850 F 
C)$5,188 U 
D)$5,188 F

Quizplus · Accepted Answer

The material variance can be calculated by adding the material price variance and the material usage variance. The material price variance is calculated as actual price - standard price multiplied by actual quantity purchased. Using the information provided, actual price is $1.20 per pound, standard price is $1.30 per pound, and actual quantity purchased is 18,500 pounds. This results in a material price variance of $1,850 F. 
The material usage variance is calculated as actual quantity used - standard quantity allowed multiplied by standard price. Using the information provided, actual quantity used is 18,200 pounds, standard quantity allowed is 17,500 pounds, and standard price is $1.30 per pound. This results in a material usage variance of $3,338 F. 
Adding the material price variance and the material usage variance results in a total material variance of $5,188 F. Therefore, the best choice is D.

Hazelton Company Hazelton Company Has the Following Information Available for December