Final answer:
The materials price variance for February is $5,330 Favorable, which is calculated by multiplying the favorable price difference, $0.25 per ounce, by the actual quantity of materials purchased, 21,320 ounces.
Step-by-step explanation:
The materials price variance is calculated by taking the difference between the actual price paid for materials and the standard price, multiplied by the quantity of materials purchased. The standard price per ounce of the raw materials is $6.50 and the actual price paid is $6.25, resulting in a $0.25 favorable variance per ounce. Because the company purchased 21,320 ounces of raw materials, the total materials price variance for February can be calculated as follows:
Materials Price Variance = (Standard Price - Actual Price) × Actual Quantity Purchased
Materials Price Variance = ($6.50 - $6.25) × 21,320 ounces
Materials Price Variance = $0.25 × 21,320 ounces
Materials Price Variance = $5,330 Favorable (F)
Since the actual price of the materials is less than the standard price, the variance is favorable, meaning the company spent less on materials than anticipated.