Assume that a portion of the spending variance for variable costs is due to the

Question

Assume that a portion of the spending variance for variable costs is due to the cost of copies (handouts) made for each student. The ?standard? allows faculty to make up to 100 copies per student at a standard cost of $0.05 per copy. During the most recent term (when 840 students were enrolled), 100,000 copies were made at an actual cost of $4,500.

Calculate the price variance for copies (hint: use the DM price and quantity formulas). Label each variance as favorable or unfavorable.

Price Variance for Copies (include U or F):

Explanation / Answer

Price variance for copies= AQ(AP-SP) = 100,000(4,500/100,000 - 0.05) = 100,000(0.045 - 0.05) = -500 favorable answer: $500 F

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.