CA Inter P4 · Chapter 12 · Question 1 of 10
Standard material for one unit of product is 4 kg at ₹25 per kg. Actual output was 2,000 units, using 8,300 kg purchased and consumed at ₹24 per kg. The material price variance is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) ₹8,300 (Favourable)
Explanation
Material price variance = (standard price - actual price) x actual quantity = (₹25 - ₹24) x 8,300 = ₹8,300 Favourable, since the actual price is lower than standard.
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