The following materials standards have been established for a particular product: The following data pertain to operations concerning the product for the last month:
The direct materials purchases variance is computed when the materials are purchased.
What is the materials price variance for the month?
A) $480 F
B) $430 F
C) $430 U
D) $480 U

Question

The following materials standards have been established for a particular product:  The following data pertain to operations concerning the product for the last month:
 The direct materials purchases variance is computed when the materials are purchased.
What is the materials price variance for the month?
A) $480 F 
B) $430 F 
C) $430 U 
D) $480 U

Quizplus · Accepted Answer

AQ × AP = $62,880
Materials price variance = (AQ × AP) − (AQ × SP)
= ($62,880) − (4,800 pounds × $13.20 per pound)
= $62,880 − $63,360
= $480 F

The Following Materials Standards Have Been Established for a Particular