Bonner Metals wants to issue new 20-year bonds for some much-needed expansion projects. The company currently has 8.5 percent bo
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Answer:
price variance: <em>1</em><em>3</em><em>,</em><em>0</em><em>50 favorable</em>
quantity variance:<em> -1,760 unfavorable</em>
Explanation:
standard quantity 5
standard price 1.1 per pound
actual quantity for 4900 units
8000 + 25,500 -7,400 = 26,100 pounds
standard quantity 4,900*5= 24,500
actual price 15,300/25,500 = 0.60
standard price = 1.10
Because actual is lower than STD the company saved money spending. It is favorable.
Because the company used more pounds than STD the quantity variance is unfavorable