The following materials standards have been established for a particular product:Standard quantity per unit of output 5.3 meters
Standard price $\quad $$\quad $$\quad $$\quad $£ 17.20 per meter
The following data pertain to operations concerning the product for the last month:Actual materials purchased $\quad 8,100$ meters
Actual cost of materials purchased $£ 141,345$
Actual materials used in production 7,600 meters
Actual output$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $1,400 units
What is the materials price variance for the month

A)£3,141 U
B)£2,025 U
C)£8,600 U
D)£8,725 U

Question

The following materials standards have been established for a particular product:Standard quantity per unit of output 5.3 meters
Standard price $\quad $$\quad $$\quad $$\quad $£ 17.20 per meter
The following data pertain to operations concerning the product for the last month:Actual materials purchased $\quad 8,100$ meters
Actual cost of materials purchased $£ 141,345$
Actual materials used in production 7,600 meters
Actual output$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $1,400 units
 What is the materials price variance for the month

A)£3,141 U
B)£2,025 U
C)£8,600 U
D)£8,725 U

Quizplus · Accepted Answer

To find the materials price variance, we need to multiply the difference between the actual price per unit and the standard price per unit with the actual quantity of materials used.

Actual price per unit = £6.80 per lb
Standard price per unit = £6.50 per lb 
Actual quantity of materials used = 10,000 lbs

Materials price variance = (actual price per unit - standard price per unit) x actual quantity of materials used
= (£6.80 - £6.50) x 10,000
= £3000 U

Therefore, the correct answer is B, which is £2,025 U.

The Following Materials Standards Have Been Established for a Particular \quad

The Following Materials Standards Have Been Established for a Particular $\quad$