Vashon Corporation had the following activity during a recent period: Standard quantity of direct materials 9,000 kilograms
Actual quantity of direct materials purchased and used 8,800 kilograms
Efficiency variance $2,400 favourable
Total direct materials budget variance $200 favourable
The standard price per kilogram was:
A)$12.00
B)$12.25
C)$12.50
D)$13.00

Question

Quizplus · Accepted Answer

The efficiency variance is favourable, which means that the actual quantity of direct materials used was less than the standard quantity. The total direct materials budget variance is also favourable, which means that the actual cost of direct materials was less than the budgeted cost. This can only be the case if the standard price per kilogram is greater than the actual price per kilogram. The only choice that meets this criterion is A) $12.00.

Vashon Corporation Had the Following Activity During a Recent Period