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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=MPV−8,200 MPV=9,400+8,200 MPV=17,600

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