Question

The Lucy Corporation purchased and used 129,000 board feet of lumber in production, at a total cost of $1,548,000. Original production had been budgeted for 22,000 units with a standard material quantity of 5.7 board feet per unit and a standard price of $12 per board foot. Actual production was 23,500 units. Compute the material price variance. a. 0 b. 59,400U c. 6,000U d. 59,400F

Answer 1

The correct answer is 0. There were no price variance.

Step-by-step explanation:

Giving the following information:

The Lucy Corporation purchased and used 129,000 board feet of lumber in production, at a total cost of $1,548,000. Original production had been budgeted for 22,000 units with a standard material quantity of 5.7 board feet per unit and a standard price of $12 per board foot. The actual production was 23,500 units.

Direct material price variance= (standard price - actual price)*actual quantity

Direct material price variance= (12 - 1,548,000/129,000)*129,000= 0