Gipple Corporation makes a product that uses a material with the quantity standard of 7.5 grams per unit of output and the price standard of $6.20 per gram. In January the company produced 3,600 units using 25,070 grams of the direct material. During the month the company purchased 27,600 grams of the direct material at $6.30 per gram. The direct materials purchases variance is computed when the materials are purchased.

The materials price variance for January is:

Multiple Choice

• $2,700 F

• $2,760 U

• $2,700 U

• $2,760 F