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    Material Price Variance

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    The Alperti Company manufactures surgical gowns for hospitals. Their controller, Ethell Hieken is preparing the variance analysis report for October. Standard Costs are as follows:

    Direct Material 2.0 yards at $6 per yard
    Direct Labor 0.25 hours at $12 per hour

    During October, Ms Hieken's report shows:
    100,000 gowns produced
    175,000 yards of fabric purchased at a cost of $1,137,500
    185,000 yards of fabric used
    Employees worked 24,000 hours at a cost of $276,000

    What is the material price variance?

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    Solution Summary

    Material price variances are examined.