Woodside Company manufactures tables with vinyl tops. The standard material cost for the vinyl used per Style-R table is $7.20 based on 8 square feet of vinyl at a cost of $.90 per square foot. A production run of 1,000 tables in January resulted in usage of 8,300 square feet of vinyl at a cost of $.80 per square foot, a total cost of $7,055. If the materials price variance was recorded when the material was issued to production, that variance was: a. $290 favorable. b. $830 unfavorable. c. $290 unfavorable. d. $830 favorable.
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.
Woodside Company manufactures tables with vinyl tops. The
a. $290 favorable.
b. $830 unfavorable.
c. $290 unfavorable.
d. $830 favorable.
Variance refers to a change between the expected value and the actual result. This term is usually used in budgeting. Variance can be of many types such as labor rate variance, material variance, overhead variance, etc.
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