An LCD screen is purchased to be used in the manufacturing of a digital watch. The Standard Price (SP)for the LCD screen used is $60.00. During the month of February, 4200 screens were purchased and used. The materials price variance was $14,700 unfavorable. The standard number of screens allowed for the actual number of watches manufactured during the period was 26,000 screens. The actual purchase price of each LCD screen may be closest to
A)$1.77 per LCD screen.
B)$60.29 per LCD screen.
C)$56.50 per LCD screen.
D)$63.50 per LCD screen.

Question

Quizplus · Accepted Answer

The materials price variance formula is (Actual Price - Standard Price) * Actual Quantity. Given the variance is $14,700 unfavorable and the standard price is $60, the actual price can be calculated as follows: $14,700 = (Actual Price - $60) * 4200. Solving for Actual Price gives $63.50.

An LCD Screen Is Purchased to Be Used in the Manufacturing