Question: Please Explain The cost data for a company are as follows: Actual results Number of material pounds used in production: 5,000 lbs. Number of units

Please Explain

The cost data for a company are as follows:

Actual results

Number of material pounds used in production: 5,000 lbs.

Number of units produced: 200 units

Total cost of purchasing material: $50,000

Number of material pounds purchased: 6,000 lbs.

The company has established the following standards:

Price per pound of materials: $8.00 per lb.

Number of pounds of material to produce one unit: 20 lbs.

What is this companys computed materials price variance?

  • $2,000 F

  • $8,000 F

    Incorrect.

  • $8,000 U

  • $2,000 U

    Correct.

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