CPA · Question 06 · Area I: Business Analysis
During the month of June, a manufacturer purchased 10,000 lbs of raw material at $5.20 per lb. The standard price is $5.00 per lb. The company used 9,500 lbs in production. The standard quantity allowed for the actual production output was 9,200 lbs. What is the Direct Materials Price Variance and the Direct Materials Usage (Efficiency) Variance?
Answer options:
Price Variance: $2,000 Unfavorable; Usage Variance: $1,500 Unfavorable
Price Variance: $1,900 Unfavorable; Usage Variance: $1,500 Unfavorable
Price Variance: $2,000 Unfavorable; Usage Variance: $1,500 Unfavorable
Price Variance: $2,000 Favorable; Usage Variance: $1,500 Favorable
50 questions · hints · full answers · grading
Expert