Casivant Corporation makes a product that uses a material with the following direct material standards: The company produced 7,300 units in November using 28,710 pounds of the material. During the month, the company purchased 30,800 pounds of the direct material at a total cost of $117,040. The direct materials purchases variance is computed when the materials are purchased.
The materials price variance for November is:
A) $5,548 U
B) $6,160 U
C) $6,160 F
D) $5,548 F

Question

Casivant Corporation makes a product that uses a material with the following direct material standards:  The company produced 7,300 units in November using 28,710 pounds of the material. During the month, the company purchased 30,800 pounds of the direct material at a total cost of $117,040. The direct materials purchases variance is computed when the materials are purchased.
The materials price variance for November is:
A) $5,548 U 
B) $6,160 U 
C) $6,160 F 
D) $5,548 F

Quizplus · Accepted Answer

AQ × AP = $117,040
Materials price variance = (AQ × AP) − (AQ × SP)
= ($117,040) − (30,800 pounds × $4.00 per pound)
= $117,040 − $123,200
= $6,160 F

Casivant Corporation Makes a Product That Uses a Material with the Following