A material price variance of $5000 (unfavourable) for a period has been calculated. The actual unit price was $9.00. The actual quantity of material used was 6000. The standard quantity of materials was 5000. Calculate the standard unit price for a unit of raw materials for the period (round where necessary).
A) $5.00
B) $8.00
C) $8.17
D) $9.83

Question

Quizplus · Accepted Answer

Material Price Variance = (Actual Price - Standard Price) x Actual Quantity
-5000 = (9 - Standard Price) x 6000
-5000/6000 = -0.8333

Standard Price = Actual Price + Material Price Variance/Actual Quantity
Standard Price = 9 - (-0.8333)/6000
Standard Price = $8.17 (rounded to nearest cent)

A Material Price Variance of $5000 (Unfavourable) for a Period