For the raw materials used to make its stoves, Kleslia, SRL has a standard price of $10.92 per gram and standard quantity per unit output of 4.3 grams. Last month there were 8,500 grams of raw material purchased for a total cost of $87,140, while 8,966 grams of raw material were used in the production of 2,201 stoves. What was the materials price variance for the month? $BLANK (favorable or Unfavorable)
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
For the raw materials used to make its stoves, Kleslia, SRL has a standard price of $10.92 per gram and standard quantity per unit output of 4.3 grams. Last month there were 8,500 grams of raw material purchased for a total cost of $87,140, while 8,966 grams of raw material were used in the production of 2,201 stoves. What was the materials price variance for the month? $BLANK (favorable or Unfavorable)
Step by step
Solved in 2 steps
