Since inventories are valued at standard cost, the material price variance is based on the materials purchased.
??????????????????????????????????????????????????????????????????????????????????????????????????????????????? $
12,000?kg material purchased should cost (x$3)??????????????????????????????? 36,000
but did cost???????????????????????????????????????????????????????????????????????????????????????? 33,600
Material price variance?????????????????????????????????????????????????????????????????????? 2,400(F)
800? units manufactured should use (x 14 kg)???????????????????????????????????11,200 kg???????
but did use????????????????????????????????????????????????????????????????????????????????????????? 11,500kg
Usage variance in kg?????????????????????????????????????????????????????????????????????????? 300kg(A)
x standard price per kg?????????????????????????????????????????????????????????????????????????? x$3
Usage variance in?????????????????????????????????????????????????????????????????????????????? $900 (A)?????????????????????