CIB Inc. produces a product requiring 4 pounds of material costing $2.50 per pou

Question

CIB Inc. produces a product requiring 4 pounds of material costing $2.50 per pound. During December, CIB purchased 4,200 pounds of material for $10,080 and used the material to produce 500 products. What was the materials price variance for December?
Question 41 options: 420 F 80 U 480 U 400 F CIB Inc. produces a product requiring 4 pounds of material costing $2.50 per pound. During December, CIB purchased 4,200 pounds of material for $10,080 and used the material to produce 500 products. What was the materials price variance for December?
CIB Inc. produces a product requiring 4 pounds of material costing $2.50 per pound. During December, CIB purchased 4,200 pounds of material for $10,080 and used the material to produce 500 products. What was the materials price variance for December?
420 F 80 U 480 U 400 F 420 F 80 U 480 U 400 F 420 F 80 U 480 U 400 F

Explanation / Answer

Hi,

Please find the answer as follows:

Direct Material Price Variance = Actual Quantity *(Actual Rate - Standard Rate) = 4200*(10080/4200 - 2.50) = 420 (F)

Option A is correct.

Thanks.

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