Asked by
Jessica Sandoval
on Nov 13, 2024Verified
Scorpion Production Company planned to use 1 yard of plastic per unit budgeted at $81 a yard. However the plastic actually cost $80 per yard. The company actually made 3900 units although it had planned to make only 3300 units. Total yards used for production were 3960. How much is the total materials variance?
A) $48600 U
B) $4860 U
C) $3960 F
D) $900 U
Total Materials Variance
The difference between the actual cost of materials used in production and the expected (or standard) cost, used to evaluate cost control.
Budgeted Units
The quantity of products or services that a company plans to sell or produce within a specific period, as outlined in its budget.
Actual Costs
The real costs incurred in the production of goods or services, including all expenses direct and indirect.
- Detect and calculate variances in direct materials (concerning amount and cost) and direct labor (efficiency and compensation rate).
Verified Answer
ME
Learning Objectives
- Detect and calculate variances in direct materials (concerning amount and cost) and direct labor (efficiency and compensation rate).