Company X has a price standard of $2 per lbs.
5,000 lbs was bought at $2.20 per lbs.
The actual quantity used was 5,000 lbs, although the standard quantity for output was 4,500 lbs
What is Company X's material price variance?
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Company X has a price standard of $2 per lbs.
5,000 lbs was bought at $2.20 per lbs.
The actual quantity used was 5,000 lbs, although the standard quantity for output was 4,500 lbs
What is Company X's material price variance?
This is my answer
(2.00-2.20) X 5000 = $1,000 U
please advise if incorrect
Fourmula
(SP-AP) X AQ
(2-2.20) X 4500 = (900)
The thread is a year old so I don't think OP cares anymore.
OP's answer was correct to begin with. Yours is incorrect because 4500 isn't the actual quantity - 5000 is.
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