Question

The Armstrong Corporation developed a flexible budget for its production process. Armstrong budgeted to use 10 comma 000 pounds of direct material with a standard cost of $ 15.00 per pound to produce 12 comma 000 units of finished product. Armstrong actually purchased 24 comma 000 pounds and used 13 comma 000 pounds of direct material with a cost of $ 23.00 per pound to produce 12 comma 000 units of finished product. Given these​ results, what is​ Armstrong's direct material price​variance?

Answer 1

Answer:

$192,000 unfavorable

Explanation:

The computation of the material price variance is shown below:

= Actual Quantity × (Standard Price - Actual Price)

= 24,000 pounds × ($15 per pound - $23 per pound)

= 24,000 pounds × $8 per pound

= $192,000 unfavorable

Simply we take the difference between the standard price and the actual price and then multiplied it by the actual quantity so that the accurate price variance could come