Imrie Corporation makes a p oduct that uses a material with the quantity standar

Question

Imrie Corporation makes a p oduct that uses a material with the quantity standard of 9.5 grams per unit of output and the price standard of 5.00 per gram n?anuary the company p oduced 2 900 units using 26,940 grams of the direct meterial. During the month the compamy purchased 28,900 grams of the direct material at $4.90 per gram. The direct materials purchases variance is computed when the materials are purchased. The materials price variance for January is: $2.755 u O $2,890 F $2.890 O $2,755 F

Explanation / Answer

Material Price Variance= Actual quantity purchased*(Actual Price-Standard Price)

                                     =28900 grams*($4.90-$5)

                                     = $2890 F

Correct option is the second one.

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