The materials price variance for October is:

A) $15,000 Unfavorable
B) $15,000 Favorable
C) $25,000 Unfavorable
D) $25,000 Favorable

Question

The materials price variance for October is:A) $15,000 UnfavorableB) $15,000 FavorableC) $25,000 UnfavorableD) $25,000 Favorable

Alexis Smith · Accepted Answer

Final Answer : B, Explanation :  The materials price variance is calculated by subtracting the actual cost of materials from the standard cost of materials, multiplied by the actual quantity of materials purchased. In this case, the actual cost of materials was $200,000 (10,000 x $20), while the standard cost of materials was $215,000 (10,000 x $21.50). This gives a materials price variance of $15,000 favorable ($215,000 - $200,000). AQ × AP = $225,000Materials price variance = (AQ × AP)? (AQ × SP)= ($225,000)? (12,000 ounces × $20.00 per ounce)= $225,000 ? $240,000= $15,000 F

The materials price variance for October is:

A) $15,000 Unfavorable
B) $15,000 Favorable
C) $25,000 Unfavorable
D) $25,000 Favorable

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