A company purchases 20000 pounds of materials. The materials price variance is $4000 favorable. What is the difference between the standard and actual price paid for the materials?

A) $1.00
B) $0.20
C) $5.00
D) Cannot be determined from the data provided.

Materials Price Variance

The difference between the actual cost of materials and the expected cost, multiplied by the amount of materials purchased.

Standard Price

A predetermined cost that companies use to value inventory and cost of goods sold, often used in budgeting and performance evaluation.

Actual Price

The real or market price at which an asset or service is bought or sold.