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The Following Materials Standards Have Been Established for a Particular

Question 203

Essay

The following materials standards have been established for a particular product:
 Standard quantity per unit of output 3.6 metre  Standard price $10.20 per metre \begin{array}{|l|r|}\hline \text { Standard quantity per unit of output } & 3.6 \text { metre } \\\hline \text { Standard price } & \$ 10.20 \text { per metre } \\\hline\end{array}
The following data pertain to operations concerning the product for the last month:
 Actual materials purchased 7,100 metres  Actual cost of materials purchased $68,515 Actual materials used in production 6,600 metres  Actual output 1,780 units \begin{array}{|l|r|}\hline \text { Actual materials purchased } & 7,100 \text { metres } \\\hline \text { Actual cost of materials purchased } & \$ 68,515 \\\hline \text { Actual materials used in production } & 6,600 \text { metres } \\\hline \text { Actual output } & 1,780 \text { units } \\\hline\end{array}
Required:
a)What was the materials price variance for the month?
b)What was the materials quantity variance for the month?

Correct Answer:

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Materials price variance = (AQ * AP)- (A...

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