Question

B.
Numerical MCQs/Short Practical Problems/ Case Studies
38. Actual units of direct materials used were 20,000 at an actual cost of 40,000 Standard unit
cost is 2.10. Assuming the materiais price variance is recognized when the materials are used,
the materials price variance (MPV) is:​

Answer 1

Answer:

60,000 will be the answer I think so..

Answer 2

Market price variance (MPV) is 200

Given: Actual cost equals to 40000 and Standard cost equals to 20000

To Find: Market Price Variance

Solution:

Actual cost per unit = 40000/20000 = 2

As per formula of Market Price Variance,

MPV = (Standard cost per unit - Actual cost per unit) × Actual quantity

MPV = (2.10-2) × 2000 = 0.10 × 2000 = 200.

Hence, Market price variance (MPV) = 200

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