Question

Rossi Inc. has a materials price standard of $2.00 per pound. Six thousand pounds of materials were purchased at $2.20 a pound. The actual quantity of materials used was 6,000 pounds, although the standard quantity allowed for the output was 5,400 pounds.

Rossi, Inc.'s total materials variance is:______

Answer 1

See below

Step-by-step explanation:

Total materials variance is computed as

= [(AQ × AP) - (AQ × SP)]

AQ = Actual Quantity = 6,000

AP = Actual Price = $2.2

SP = Standard Price = $2

Then,

Rossi's inc. Materials price variance

= [(6,000 × $2.2) - (6,000 × $2)]

= $13,200 - $12,000

= $1,200 Unfavorable