The Porter Company has a standard cost system.In July the company purchased and used 22,500 pounds of direct material at an actual cost of $53,000;the materials quantity variance was $1,875 Unfavorable;and the standard quantity of materials allowed for July production was 21,750 pounds.The materials price variance for July was:
A)$2,725 F
B)$2,725 U
C)$3,250 F
D)$3,250 U

Question

Quizplus · Accepted Answer

Materials price variance = (AQ F1F1F1S1F1F1F10 AP)- (AQ F1F1F1S1F1F1F10 SP)
= $53,000 - (22,500 pounds F1F1F1S1F1F1F10 $2.50 per pound)= $53,000 - $56,250 = $3,250 F

The Porter Company Has a Standard Cost System