You budgeted to use 2 pounds of materials per unit at a budgeted cost of $100 pe

Question

You budgeted to use 2 pounds of materials per unit at a budgeted cost of $100 per pound. Budgeted production and sales volume was $5000 units. Actual productions and sales volume was $6000 units and you used a total of 11,900 pounds of material at an actual cost of $102 per pound. The input price and input efficiency variables are:

Input Price Input Efficiency

A) Favorable Favorable

B) Favorable . Unfavorable

C) Unfavorable . Favorable

D) Unfavorable Unfavorable

E) Not enough information- need to know the "flexible" and "as-if buget amounts.

Explanation / Answer

Price variance = (100-102)*11900 = 23800 U

Efficiency variance = (6000*2-11900)*100 = 10000 F

so price variance is unfavorable and efficiency variance is favorable

so answer is c) Unfavorable . Favorable

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.