Question

If the materials price variance is $3600 F and the materials quantity and labor variances are each $2700 U, what is the total materials variance?

Answer 1

The total materials variance is calculated by adding the materials price variance ($3600 F) and the materials quantity variance ($2700 U), resulting in a total materials variance of $900 favorable.

Step-by-step explanation:

To calculate the total materials variance, we need to consider both the materials price variance and the materials quantity variance. The materials price variance is $3600 F (favorable), and the materials quantity variance is $2700 U (unfavorable). To find the total materials variance, we simply combine these two variances.

Total Materials Variance = Materials Price Variance + Materials Quantity Variance
= $3600 F + $2700 U
= $3600 - $2700
= $900 F

Therefore, the total materials variance is $900 favorable, which indicates that the total cost of materials was $900 less than what was originally budgeted for.