If the actual price input is $700, the budgeted price of input is $400 and the actual quantity of input are 50 units, then the price variance will be ___________?
Correct answer: A. $15,000
- A. $15,000
- B. $13,000
- C. $11,000
- D. $9,000
Explanation
Price variance equals (actual price − standard price) × actual quantity: ($700 − $400) × 50 = $15,000. Because the actual price is higher, this is an unfavorable variance.
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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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