The price variance for Ruby company is at an unfavorable position that is $19,415, the quantity variance stands at $6,370 (favorable condition) and the cost variance has unfavorable balance that is equal to $13,045.
<h3>What is a variance?</h3>
A variance in accounting is the distinction between a forecasted quantity and the real quantity. Variances are common in budgeting, however, you may have a variance in something which you forecast.
As per the information, we have to calculate:
a) Price variance: (Standard Price - Actual price) * Actual Quantity
Price variance: ($9.10 - $9.65) * 35,300
Price variance: $0.55 * 35,300
Price variance: $19,415 Unfavorable.
b) Quantity variance = (Standard Quantity - Actual Quantity) * Standard Price
Quantity variance = (7,200 * 5 - 35,300) * $9.10
Quantity variance = (36,000 - 35,300) * $9.10
Quantity variance = $6,370 Favorable.
C) Cost variance = $19,415 Unfavorable + $6,370 Favorable
Cost variance = $13,045 U
Hence, The price variance for Ruby company is at an unfavorable position that is $19,415, the quantity variance stands at $6,370 (favorable condition) and the cost variance has an unfavorable balance that is equal to $13,045.
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