The ABC Company uses standard costing and has established the following standards for its single product:

Direct Materials	2 litres at $3 per litre
Direct Labour	0.5 hours at $8 per hour
Variable Manufacturing Overhead	0.5 hours at $2 per hour

During March, the company made 4,000 units and incurred the following costs:

Direct Materials Purchased	8,100 litres at $3.10 per litre
Direct Materials Used	7,600 litres
Direct Labour Used	2,200 hours at $8.25 per hour
Actual Variable Manufacturing Overhead	4,175

The company applies variable manufacturing overhead to products on the basis of direct labour hours.

Question 1

What was the materials price variance for March? (2 marks)

$Answer, Answer