Georgia Peach Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units. Georgia Peach actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units. What is Georgia Peach's direct materials quantity variance? Group of answer choices 1)$2,500 unfavorable. 2)$2,550 unfavorable. 3)$ 400 unfavorable. 4)$2,950 unfavorable. 5)$ 450 unfavorable.
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.
Georgia Peach Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units. Georgia Peach actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units.
What is Georgia Peach's direct materials quantity variance?
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