The standards for product V28 call for 7.5 pounds of a raw material that costs $18.10 per pound. Last month, 1,400 pounds of the raw material were purchased for $24,990. The actual output of the month was 160 units of product V28. A total of 1,300 pounds of the raw material were used to produce this output.The direct materials purchases variance is computed when the materials are purchased.Required:a. What is the materials price variance for the month?b. What is the materials quantity variance for the month?

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Asharia Woolard · Accepted Answer

Final Answer : a.Materials price variance = (Actual quantity × Actual price) − (Actual quantity × Standard price)= $24,990 − (1,400 pounds × $18.10 per pound)= $24,990 − $25,340= $350 Favorableb.Standard Quantity = Standard quantity per unit × Actual output = 7.5 pounds per unit × 160 units = 1,200 poundsMaterials quantity variance = (Actual quantity − Standard quantity*) × Standard price= (1,300 pounds − 1,200 pounds) × $18.10 per pound= 100 pounds × $18.10 per pound= $1,810 Unfavorable

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