Carskadon Corporation makes a product that uses a material with the following direct material standards: The company produced 3,000 units in December using 6,270 pounds of the material. During the month, the company purchased 7,100 pounds of the direct material at a total cost of $13,490. The direct materials purchases variance is computed when the materials are purchased.
-The materials price variance for December is:
A)$710 F
B)$710 U
C)$660 F
D)$660 U

Question

Carskadon Corporation makes a product that uses a material with the following direct material standards:  The company produced 3,000 units in December using 6,270 pounds of the material. During the month, the company purchased 7,100 pounds of the direct material at a total cost of $13,490. The direct materials purchases variance is computed when the materials are purchased.
-The materials price variance for December is:
A)$710 F 
B)$710 U 
C)$660 F 
D)$660 U

Quizplus · Accepted Answer

Materials price variance = (AQ F1F1F1S1F1F1F10 AP)- (AQ F1F1F1S1F1F1F10 SP)
= $13,490 - (7,100 pounds F1F1F1S1F1F1F10 $2.00 per pound)
= $13,490 - $14,200 = $710 F

Carskadon Corporation Makes a Product That Uses a Material with the Following