Question

Suver Corporation has a standard costing system. The following data are available for June:

Actual quantity of direct materials purchased		80,000	pounds
Standard price of direct materials	$	9.00	per pound
Material price variance	$	8,000	Unfavorable
Material quantity variance	$	6,000	Favorable

The actual price per pound of direct materials purchased in June was:

Answer 1

Material price variance:it refers to the difference between standard price and actual price for the actual quantity of materials used for production.

we know material price variance = (standard price* actual Quantity)-(Actual price *actual quantity)

or

=(standard price-actual price)*actual quantity

-8000=($9*80000)-(Actual price*80000)

Actual price *80000=$720000+$8000

Actual price = $728000/80000

Actual price = 9.1

therefore the actual price per ppound of direct materials purchased in june was $91

Verification

Materila price variance = (Standard price - actual price)*actual quntity

=($9-9.1)*80000

(-0.1)*80000

=-8000