A company purchases 130,000 kilograms of materials.The materials price variance is $26,000 favourable.What is the difference between the standard and actual price paid for the materials?
A)$5.00
B)$0.20
C)$5.50
D)$0.25

Question

Quizplus · Accepted Answer

The materials price variance formula is (Standard Price - Actual Price) x Actual Quantity. Given a favourable variance of $26,000 for 130,000 kilograms, we divide $26,000 by 130,000 kilograms to find the difference between the standard and actual price, which is $0.20.

A Company Purchases 130,000 Kilograms of Materials