Answered

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A company purchases 20,000 pounds of materials. The materials price variance is $4,000 favorable. What is the difference between the standard and actual price paid for the materials

Sagot :

facundobuzzetti

Answer:

The actual price was $0.2 lower than the standard price.

Explanation:

Giving the following information:

A company purchases 20,000 pounds of materials. The materials price variance is $4,000 favorable.

To calculate the direct material price difference, we need to use the following formula:

Direct material price variance= (standard price - actual price)*actual quantity

4,000 = (direct material price difference)*20,000

$0.2= direct material price difference

The actual price was $0.2 lower than the standard price.

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