alleryStart learning →Standard price is Rs 10 per kg. A firm buys 500 kg at Rs 11 per kg. What is the material price variance?
ARs 500 favourable
BRs 500 adverse
CRs 550 adverse
DRs 5,000 adverse
Answer & Solution
Correct answer: B. Rs 500 adverse
Price variance is actual quantity times the price gap: 500 kg x Re 1 extra = Rs 500, and paying more than standard makes it adverse.
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Related questions
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