Standard amount of materials per unit 5 its Standard price o

Standard amount of materials per unit 5 its Standard price of materials $8/lb Cost of materials purchased $136,000 Amount of materials purchased 16,000 lbs Amount of materials used 15,000 lbs Units of product manufactured 3,500 The company determines all variances as early as possible. The materials price variance was $________.?

Solution

Materials price variance = Actual cost-(AQ*SP) = 136000-(16000*8)= 8000 Unfavorable