# Formula to compute the raw materials price variance

Actual price per unit of input (per lb ) $ 7.80

Standard price per unit of input (per lb) $ 7.00

Standard inputs allowed per unit of output 10 lbs

Actual units of input 115,000 lbs

Actual units of output (product) 14,400

What is the formula to compute the raw materials price variance?

Compute the company's raw materials price variance. As with all variances, show whether it is favorable or unfavorable.

Explain what the variance means.

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#### Solution Summary

This solution helps explore how to compute the raw materials price variance.

$2.19