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