Table Manufacturing Company produces one style of tables. The following data per
ID: 2563183 • Letter: T
Question
Table Manufacturing Company produces one style of tables.
The following data pertain to producing one table
Planned production/month
units (one table)
90
Piece of woods (M)
20
Estimated M price
$35
Actual production
Quantity purchased (QP)
22
Find actual price (AP)
x
Assuming that the manager wants the
total material variance
0
Less than $30
Between $30 and $33
Between $34 and $35
More than $36
Table Manufacturing Company produces one style of tables.
The following data pertain to producing one table
Planned production/month
units (one table)
90
Piece of woods (M)
20
Estimated M price
$35
Actual production
Quantity purchased (QP)
22
Find actual price (AP)
x
Assuming that the manager wants the
total material variance
0
Explanation / Answer
Total Material Variance = (Standard Quantity * Standard Price) - (Actual Quantity * Actual Price)
Given,
Substituting the above values in the Total Material Variance Equation.
Total Material Variance = (Standard Quantity * Standard Price) - (Actual Quantity * Actual Price)
0 = (20*35) - (22*x)
0 = 700 - 22*x
22*x = 700
x = 700/22
x = 31.818181
Therefore, Actual Price = $ 31.818181
Hence, the right answer is Option (b) i.e., Between $ 30 and $ 33
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