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    Materials price variance for the month

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    The following materials standards have been established for a particular raw material used in the company's sole product:

    Standard quantity per unit of output 0.1 pound
    Standard price $18.20 per pound

    The following data pertain to operations for the last month:

    Actual materials purchased 5,700 pounds
    Actual cost of materials purchased $100,320
    Actual materials used in production 5,600 pounds
    Actual output 55,800 units

    What is the materials price variance for the month?

    $1,820 U
    $352 U
    $1,760 U
    $3,420 F

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    Solution Summary

    This provides the steps to calculate the materials price variance very simply, using brief calculations.