For the current period, Boggs Company's manufacturing operations yield a $5,250 unfavorable price variance on its direct materials usage. The actual price per pound is $56.50 and the standard price per pound is $55.00. How many pounds of material are used in the current period?

Question

Quizplus · Accepted Answer

The unfavorable price variance means that the actual price paid for direct materials is higher than the standard price.

Let X be the number of pounds of materials used.

We know that:

Actual price * Actual quantity used = Actual cost 
Standard price * Standard quantity allowed = Standard cost

We are given:

Actual price = $56.50 
Standard price = $55.00 
Price variance = $5,250 unfavorable 
Actual cost - Standard cost = Price variance

Substituting the values and solving for X:

$56.50X - $55.00X = -$5,250 
$1.50X = -$5,250 
X = 3,500 pounds

Therefore, the answer is choice C, 3,500.

For the Current Period, Boggs Company's Manufacturing Operations Yield a $5,250