Question

Majer Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 3.0 ounces $ 7.50 per ounce $ 22.50 Direct labor 0.6 hours $ 13.50 per hour $ 8.10 Variable overhead 0.6 hours $ 6.00 per hour $ 3.60 The company reported the following results concerning this product in February. Originally budgeted output 7,600 units Actual output 7,400 units Raw materials used in production 22,040 ounces Actual direct labor-hours 4,640 hours Purchases of raw materials 23,640 ounces Actual price of raw materials $ 7.25 per ounce Actual direct labor rate $ 12.10 per hour Actual variable overhead rate $ 5.10 per hour The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The materials price variance for February is:homeworklib

Answer 1

The materials price variance for February was $5,910, which indicates a favorable variance as the actual price of materials was less than the standard price.

Step-by-step explanation:

The materials price variance is calculated as the difference between the actual cost of materials and the standard cost, multiplied by the actual quantity purchased. In this case:

Materials Price Variance = (Standard Price - Actual Price) × Actual Quantity Purchased

Materials Price Variance = ($7.50 - $7.25) × 23,640 ounces

Materials Price Variance = $0.25 × 23,640 ounces

Materials Price Variance = $5,910

Thus, the materials price variance for February was $5,910, which is favorable because the actual price is less than the standard price.