The materials price variance for January is:

A) $2,482 F
B) $2,740 U
C) $2,482 U
D) $2,740 F

Question

The materials price variance for January is:A) $2,482 FB) $2,740 UC) $2,482 UD) $2,740 F

Spencer Kring · Accepted Answer

Final Answer : B, Explanation :  The materials price variance is calculated as Actual Quantity (AQ) multiplied by the difference between Actual Price (AP) and Standard Price (SP). In January, AQ = 11,000 pounds and SP = $8 per pound. The total cost of materials purchased was $96,800, which means that AP = $8.80 per pound ($96,800 ÷ 11,000 pounds). Therefore, the materials price variance is:AQ x (AP - SP) = 11,000 x ($8.80 - $8) = $2,740 U Materials price variance = AQ × (AP ? SP)= 27,400 grams × ($6.10 per gram ? $6.00 per gram)= 27,400 grams × ($0.10 per gram)= $2,740 UReference: CH09-Ref34Luma Inc.has provided the following data concerning one of the products in its standard cost system.   The company has reported the following actual results for the product for September:

The materials price variance for January is:

A) $2,482 F
B) $2,740 U
C) $2,482 U
D) $2,740 F

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