Question

Coronado Industries has a materials price standard of $2.00 per pound. 4600 pounds of materials were purchased at $2.20 a pound. The actual quantity of materials used was 4600 pounds, although the standard quantity allowed for the output was 3700 pounds. Coronado Industries's total materials variance is

Answer 1

Answer:

$2,720 unfavorable

Explanation:

The computation of the material price variance is shown below:

=  Actual Quantity × Actual Rate - Standard Quantity × Standard Rate

= 4,600 pounds × $2.20 per pound - 3,700 pounds × $2 per pound

= $10,120 - $7,400

= $2,720 unfavorable

Since the standard cost is less than the actual cost so it is come to be unfavorable