Aspire Liquids Inc. provides the following information regarding its standard cost system.

	Standard per Unit	Standard Price	Standard Price per Unit
Direct Materials	3 gallons	$5.00 per gallon	$15.00

During the period, the company produced and sold 23,000 units and actually used 75,000 gallons of Direct Materials at an actual cost of $4.75 per gallon.

Which of the following is the correct calculation and interpretation of the Price Variance for Aspire Liquids Inc.?

1. $75,000 U
2. $18,750 F
3. $356,250 F
4. $30,000 U
5. $4.75 F
6. $375,000 F

Which of the following is the correct calculation and interpretation of the Quantity Variance for Aspire Liquids Inc.?

1. $30,000 F
2. $345,000 U
3. $75,000 U
4. $30,000 U
5. $5,675 F
6. None of the listed answers are correct.

Which of the following is the correct calculation and interpretation of the Flexible-Budget Variance for Aspire Liquids Inc.?

1. $18,750 F
2. $69,000 U
3. $11,250 U
4. $14,750 F
5. $375,000 U
6. None of the listed answers are correct.

Answer rating: 100% (QA)

To calculate the variances we need to compare the actual quantities and prices with the standard qua... View the full answer