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Price Variances and Purchases

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Price variance 12,000 U
Usage variance 9,000 F

The standard cost for material is $2 per pound and three pounds per unit. 20,000 units were produced. The purchase price variance was .30 per pound.

Calculate:
a. Pounds purchased
b. Pounds used

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Solution Summary

This solution calculates the pounds purchased and used based on the standard cost for material.

Solution Preview

Purchase price variance = (Standard price - Actual price) * Actual quantity purchased

12,000 = ($2 - $2.3) × ...

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