All Urban Company produces a product requiring 4 pounds of material costing $3.50 per pound. During December All Urban purchased 4200 pounds of material for $14112 and used the material to produce 500 products. What was the materials price variance for December?

A) $560 F
B) $588 F
C) $112 U
D) $672 U

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Joseph Edwin Perez · Accepted Answer

Final Answer : B, Explanation :  The materials price variance is calculated as (Actual Price - Standard Price) x Actual Quantity. The standard price is $3.50 per pound, and the actual price can be found by dividing the total cost of materials purchased ($14112) by the quantity purchased (4200 pounds), which equals $3.36 per pound. The variance is then ($3.36 - $3.50) x 4200 = -$0.14 x 4200 = -$588, indicating a $588 favorable variance since the actual price per pound is less than the standard price.

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All Urban Company produces a product requiring 4 pounds of material costing $3.50 per pound. During December All Urban purchased 4200 pounds of material for $14112 and used the material to produce 500 products. What was the materials price variance for December?A) $560 FB) $588 FC) $112 UD) $672 U

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