Question

Last month 75,000 pounds of direct material were purchased and 71,000 pounds were used, if the actual purchase price per pound was $0.5 more than the standard purchase price per pound, then the material price variance was:A $2000FB $37500FC $37500UD $35500U

Answer 1

$37,500

Step-by-step explanation:

Materia price variance means difference between standard price and actual price.

actaul price per pound=$0.5

actual quantity=75000

Materialvprice value =Actual Quantity of material Purchased ×(actual cost - standard cost)

=75000×0.5

=$37500

∴ Material price variance=$37500

Answer 2

$37500 UD

Step-by-step explanation:

Material Price Variance = Actual Quantity purchased

(Actual Price – Standard Price)

= 75,000 × $0.5= 37,500 = $37,500 unfavorable

Therefore the material price variance of $37,400 is unfavourable