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Nimfa-mama [501]
3 years ago
5

The Armstrong Corporation developed a flexible budget for its production process. Armstrong budgeted to use 12,000 pounds of dir

ect material with a standard cost of $14 per pound to produce 14,000 units of finished product. Armstrong actually purchased 24,000 pounds and used 15,000 pounds of direct material with a cost of $30 per pound to produce 14,000 units of finished product. Given these​ results, what is​ Armstrong's direct material price​variance?
a. $234,000 unfavorable
b. $156,000 unfavorable
c. $234,000 favorable
d. $156,000 favorable
Business
1 answer:
quester [9]3 years ago
4 0

Answer:

A. $234,000 unfavorable

Explanation:

Calculation to determine Armstrong's direct material price variance

Using this formula

Direct material price variance=[(Standard cost-Actual cost)*Actual quantity]

Let plug in the formula

Direct material price variance=[($11-$24)*18,000)

Direct material price variance=$13*18,000

Direct material price variance=$234,000 Unfavorable

Therefore Armstrong's direct material price variance is $234,000 Unfavorable

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