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Materials price variance for the month

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

Solution Summary

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