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bernie2981 bernie2981
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Tommy's Toys produces two types of toys: trains and dolls. Tommy's uses stainless steel to manufacture the trains and plastic to manufacture the dolls. Information regarding the usage of steel and plastic for the past year follows:

Product Names   Steel   Plastic
Direct materials information      
Standard pounds per unit   1 lb.   0.5 lb.
Standard Price (SP) per pound   $1.50   ?
Actual Quantity (AQ) used per unit   1.5 lbs.   0.75 lbs.
Actual Price (AP) paid for material   $1.25   $2.00
Actual Quantity Purchased (AQP) and used   2,500 lbs.   1,200 lbs.
Price variance   ?   $900 F
Quantity variance   $206 U   ?
Flexible budget variance   ?   $522 F
Number of units produced   275   550

What is the price variance for steel used to manufacture the trains?
A) $625 favorable
B) $625 unfavorable
C) $103 unfavorable
D) $103 favorable
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Managerial Accounting

Managerial Accounting


Edition: 4th
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nucleinuclei
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8 years ago
You make an excellent tutor!
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Brilliant ツ
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Thanks for your help!!
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