Suppose that price is below the minimum average total cost (ATC) but above the minimum average variable cost (AVC) and that the
1 answer:
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Answer:
Favorable for price and unfavorable for usage.
Explanation:
Provided Information,
Standard Material = 2.2 pounds per unit
Standard cost = $2 per pound
Actual Quantity = 2.3 pounds per unit
Actual cost = $1.95 per pound
In Material Price variance we have = (Standard Price - Actual Price) Actual Quantity
Since Standard Price $2 is more than actual price = $1.95 the variance is favorable.
In material quantity variance we have = (Standard Quantity - Actual Quantity) Standard Rate
Since actual quantity used = 2.3 pounds is more than standard 2.2 pounds the variance will be unfavorable
Therefore, Price Variance = Favorable, and Quantity Variance = Unfavorable.
Answer:
d) overapplied $160
Explanation:
$35,000 expected overhead / 5,000 machine= 7 dollar per machine hour are spend on overhead
<em><u>applied overhead:</u></em>
4,980 x 7 = 34,860
<u><em>actual overehad:</em></u> 34,700
As the amount of cost enter by the accounting are above the real cost, we are going to increase the manufacturing overhead cost and making the net income lower for this particular reason.