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KatRina [158]
3 years ago
11

Shawn Incorporated planned to produce 3,000 units of its single product, Megatron, during November. The standard specifications

for one unit of Megatron include six pounds of material at $0.30 per pound. Actual production in November was 3,100 units of Megatron. The accountant computed a favorable materials price variance of $380 and an unfavorable materials quantity variance of $120. Based on these variances, one could conclude that:_________
Business
1 answer:
kow [346]3 years ago
7 0

Answer: The actual cost of materials was less than the standard cost

Explanation:

Net materials cost variance = Favorable materials price variance + Favorable materials quantity variance

= 380 + (-120 unfavorable)

= 380 - 120

= $260 favorable

<em>As the materials cost variance is favorable, it means that the actual cost of materials was less than what was budgeted for it or rather its standard cost. </em>

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