The Armstrong Corporation developed a flexible budget for its production process.Armstrong budgeted to use 16,000 pounds of direct material with a standard cost of $18 per pound to produce 12,000 units of finished product.Armstrong actually purchased 18,000 pounds and used 17,000 pounds of direct material with a cost of $21 per pound to produce 12,000 units of finished product.
Given these results,what is Armstrong's direct material price variance?

Question

Quizplus · Accepted Answer

C)
Material Price Variance.= (Actual Price (AP)per unit - Standard Price (SP)per unit)× Actual Quantity Purchased (AQP)
$54,000 U = ($21 - 18)× 18,000

The Armstrong Corporation Developed a Flexible Budget for Its Production