Bumgardner Inc. has provided the following data concerning one of the products in its standard cost system. The company has reported the following actual results for the product for April:
The direct materials purchases variance is computed when the materials are purchased.
The raw materials price variance for the month is closest to:
A) $45,780 F
B) $45,780 U
C) $41,447 U
D) $41,447 F

Question

Bumgardner Inc. has provided the following data concerning one of the products in its standard cost system.  The company has reported the following actual results for the product for April:
 The direct materials purchases variance is computed when the materials are purchased.
The raw materials price variance for the month is closest to:
A) $45,780 F 
B) $45,780 U 
C) $41,447 U 
D) $41,447 F

Quizplus · Accepted Answer

Materials price variance = (AQ × AP) − (AQ × SP)
= AQ × (AP − SP)
= 65,400 liters × ($5.70 per liter − $5.00 per liter)
= 65,400 liters × ($0.70 per liter)
= $45,780 U