If the actual price input is $500, the budgeted price of input is $300 and the actual quantity of input is 50 units, then the price variance would be __________?
Correct answer: D. $10,000
- A. $4,000
- B. $6,000
- C. $8,000
- D. $10,000
Explanation
Price variance equals the price difference multiplied by the actual quantity: ($500 − $300) × 50 = $10,000. Since the actual price is higher, it is an unfavorable variance, but its amount is $10,000.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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