Majer Corporation makes a product with the following standard costs: The company

Question

Majer Corporation makes a product with the following standard costs:

The company reported the following results concerning this product in February.

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The materials price variance for February is:

Multiple Choice

$17,630 U

$17,630 F

$9,390 F

$9,390 U

Standard Quantity
or Hours Standard Price or
Rate Standard Cost Per Unit Direct materials 3.0 ounces $ 13.50 per ounce $ 40.50 Direct labor 0.6 hours $ 19.50 per hour $ 11.70 Variable overhead 0.6 hours $ 12.00 per hour $ 7.20

Explanation / Answer

Answer is C. $9,390F

Material Price variance = Actual Quantity purchased* (Actual Price - Standard Price) Material Price variance = 37,560 * ($13.25 - $13.50) Material Price variance = $9,390 F

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