The following materials standards have been established for a particular product: The following data pertain to operations concerning the product for the last month:
-What is the materials price variance for the month?
A) $3,420 F
B) $3,720 F
C) $3,720 U
D) $3,420 U

Question

The following materials standards have been established for a particular product:  The following data pertain to operations concerning the product for the last month: 
-What is the materials price variance for the month?
A) $3,420 F 
B) $3,720 F 
C) $3,720 U 
D) $3,420 U

Quizplus · Accepted Answer

To calculate the materials price variance, we need to find the difference between the actual price paid for materials and the standard price established for those materials, multiplied by the actual quantity of materials used. 
Actual price: 12,040 
Standard price: 12,360 
Actual quantity: 7,200 
Materials price variance = (12,040 - 12,360) x 7,200 = $3,720 U (unfavorable)

The Following Materials Standards Have Been Established for a Particular