Cost system. The company has established the following standard for the materials costs of one unit of product: Standard Standard Quantity 6.0 pounds Standard Cost $45.60 Price $7.60/pound uring April, the company purchased 171,000 pounds of direct material at a total cost of $1,316,700. The company anufactured 31,000 units of product during April using 187,240 pounds of direct materials. What is the materials price ariance for April? (Do not round intermediate calculations.) ur instructor has provided the following variance formulas for you: rect Materials Variances aterials Price Variance: aterials Quantity Variance: AQ(AP - SP) SP(AQ - SQ)

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Chapter1: Financial Statements And Business Decisions
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### Urban Products Corporation: Standard Cost System

Urban Products Corporation uses a standard cost system. The company has established the following standard for the materials costs of one unit of product:

#### Standard Cost Information
- **Standard Quantity**: 6.0 pounds
- **Standard Price**: $7.60/pound
- **Standard Cost**: $45.60

#### April Transactions
During April, the company purchased 171,000 pounds of direct material at a total cost of $1,316,700. The company manufactured 31,000 units of product during April using 187,240 pounds of direct materials. 

**Objective**: What is the materials price variance for April?
*(Do not round intermediate calculations)*

#### Variance Formulas
Your instructor has provided the following variance formulas for you:

1. **Direct Materials Variances**
   - **Materials Price Variance**: \( \text{AQ}(\text{AP} - \text{SP}) \)
   - **Materials Quantity Variance**: \( \text{SP}(\text{AQ} - \text{SQ}) \)

#### Explanation of Variables:
- **AQ**: Actual Quantity of direct materials used.
- **AP**: Actual Price per unit of direct materials.
- **SP**: Standard Price per unit of direct materials.
- **SQ**: Standard Quantity of direct materials allowed for actual production.

Use these formulas and data to calculate and analyze the materials price variance for April.
Transcribed Image Text:### Urban Products Corporation: Standard Cost System Urban Products Corporation uses a standard cost system. The company has established the following standard for the materials costs of one unit of product: #### Standard Cost Information - **Standard Quantity**: 6.0 pounds - **Standard Price**: $7.60/pound - **Standard Cost**: $45.60 #### April Transactions During April, the company purchased 171,000 pounds of direct material at a total cost of $1,316,700. The company manufactured 31,000 units of product during April using 187,240 pounds of direct materials. **Objective**: What is the materials price variance for April? *(Do not round intermediate calculations)* #### Variance Formulas Your instructor has provided the following variance formulas for you: 1. **Direct Materials Variances** - **Materials Price Variance**: \( \text{AQ}(\text{AP} - \text{SP}) \) - **Materials Quantity Variance**: \( \text{SP}(\text{AQ} - \text{SQ}) \) #### Explanation of Variables: - **AQ**: Actual Quantity of direct materials used. - **AP**: Actual Price per unit of direct materials. - **SP**: Standard Price per unit of direct materials. - **SQ**: Standard Quantity of direct materials allowed for actual production. Use these formulas and data to calculate and analyze the materials price variance for April.
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