Question

O Purchase Department
O Sales Department
If Material Cost Variance is Rs. 1 point
9,400 (Favourable) and Material
Usage Variance is Rs. 8,200
(Adverse), then Material Price
Variance is --
O
Rs. 5,600 (Favourable)​

Answer 1

Answer:

The entry to record cost of goods sold includes a credit to ... (c) Sales (d) Work in Process Inventory ... is Rs.9,400 (favourable) and material usage variance is Rs.8,200 (adverse), then ...

Answer 2

Given are the Material cost and usage variances, Find the Material price Variance

Explanation:

• Material Cost Variance (MCV) is the difference between the standard cost of material and the actual cost of materials.
• When the Actual cost is lower than the standard cost the MCV is considered favorable and is mathematically positive.
• Material Usage Variance (MUV) is the difference between the actual material used and the standard amount of material required.
• If the actual material used is more than that of the standard amount required then the MUV is considered adverse and is mathematically negative.  
• Here we have, $MCV=9,400\ \ \ \ MUV=-8,200$
• Hence, we get the Material Price Variance (MPV) as,
• $MCV=MUV+MPV\\->MPV=MCV-MUV\\->MPV=9400-(-8200)\\->MPV= Rs.\ 17,600$    ---->ANSWER