Hurren Corporation makes a product with the following standard costs: The company reported the following results concerning this product in June. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
-The materials price variance for June is:
A)$3,180 U
B)$2,860 F
C)$2,860 U
D)$3,180 F

Question

Hurren Corporation makes a product with the following standard costs:  The company reported the following results concerning this product in June.  The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
-The materials price variance for June is:
A)$3,180 U 
B)$2,860 F 
C)$2,860 U 
D)$3,180 F

Quizplus · Accepted Answer

Materials price variance = AQ (AP - SP)
= 31,800 grams ($8.10 per gram - $8.00 per gram)
= 31,800 grams ($0.10 per gram)= $3,180 U

Hurren Corporation Makes a Product with the Following Standard Costs