Asked by Urbano Contreras on Mar 10, 2024
Verified
The raw materials price variance for the month is closest to:
A) $51,600 U
B) $48,568 F
C) $51,600 F
D) $48,568 U
Raw Materials Price Variance
The difference between the actual cost and the standard cost of raw materials used in production.
- Understand how to calculate materials price variance.
- Explicate the defining details of a favorable (F) in comparison to an unfavorable (U) variance.
Verified Answer
RH
Raneen HindiMar 10, 2024
Final Answer :
A
Explanation :
Materials price variance = (AQ × AP)− (AQ × SP)
= $548,250 − (64,500 grams × $7.70 per gram)
= $548,250 − $496,650
= $51,600 U
= $548,250 − (64,500 grams × $7.70 per gram)
= $548,250 − $496,650
= $51,600 U
Learning Objectives
- Understand how to calculate materials price variance.
- Explicate the defining details of a favorable (F) in comparison to an unfavorable (U) variance.