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      Question

      Material cost variances are analyzed to understand the

      reasons for differences between actual and standard costs. The material cost variance is the total variance. Given, material cost variance is Rs. 9,400 (favorable) and material usage variance is Rs. 8,200 (adverse), then material price variance (MPV) is
      A Rs. 5,600 (favorable) Correct Answer Incorrect Answer
      B Rs. 5,600 (adverse) Correct Answer Incorrect Answer
      C Rs. 6,400 (favorable) Correct Answer Incorrect Answer
      D Rs. 17,600 (favorable) Correct Answer Incorrect Answer
      E None of the these Correct Answer Incorrect Answer

      Solution

      MCV=MPV+MUV 9,400=MPVβˆ’8,200 MPV=9,400+8,200 MPV=17,600

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