Question

All of the purchased raw material was transferred to work in process, and the materials quantity variance was unfavorable by $11,000. Direct labor - actual cost $140,000 Direct labor - standard cost for output 132,000 The labor efficiency variance was favorable by $7,600.

(a) Calculate materials price variance.
(b) Calculate materials quantity variance.

Answer 1

Materials price variance = $8,000

Materials quantity variance = -$11,000

Step-by-step explanation:

(a) Calculate materials price variance

We were given:

Direct labor - actual cost $140,000 Direct labor - standard cost for output 132,000

The formula for material price variance = Actual cost - Standard cost

Material price variance = $140,000 - $132,000

Material price variance = $8,000

b) Material Quantity variance:

In the question we were told that, the materials quantity variance was unfavorable by $11,000 ,

Hence the Material Quantity variance because is was unfavorable is - $11,000