Question

last month, 73,000 kilograms of direct materials were purchased, and 67,000 kilograms were used. if the actual purchase price per kilogram was $0.50 more than the standard purchase price per kilogram, what was the materials price variance?

Answer 1

The materials price variance is calculated by multiplying the difference between the actual purchase price and the standard price per kilogram by the quantity of materials purchased; thus, it would be $36,500.

Step-by-step explanation:

The student is asking how to calculate the materials price variance when given the quantity of materials purchased, the quantity used, and the actual purchase price compared to the standard purchase price per kilogram. To calculate the materials price variance, you would take the difference between the actual price and the standard price and multiply it by the quantity of materials actually purchased.

Here's how to calculate it:

1. Determine the difference between the actual and standard prices per kilogram, which is $0.50 more than the standard price.
2. Multiply this difference by the actual quantity of materials purchased, which is 73,000 kilograms.
3. The result is your materials price variance.

So, the materials price variance would be:

Materials Price Variance = ($0.50) * (73,000 kg) = $36,500