. The standard and actual price per pound of raw material are P4 and P4.50 respectively. A total of pounds of raw material was purchased and then used to produce 5,000 units. The quantity standard allow two (2) pounds of raw material per unit produced. What was the materials quantity variance?
. The standard and actual price per pound of raw material are P4 and P4.50 respectively. A total of pounds of raw material was purchased and then used to produce 5,000 units. The quantity standard allow two (2) pounds of raw material per unit produced. What was the materials quantity variance?
Chapter1: Financial Statements And Business Decisions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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8. The standard and actual price per pound of raw material are P4 and P4.50 respectively. A total of pounds of raw material was purchased and then used to produce 5,000 units. The quantity standard allow two (2) pounds of raw material per unit produced. What was the materials quantity variance?
P5,000 favorable
P2,000 favorable
P5,000 unfavorable
P2,000 unfavorable
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