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 actual price per kilogram was:
A)$12.00
B)$12.25
C)$12.50
D)$13.00

Question

Quizplus · Accepted Answer

The efficiency variance formula is:
(Standard quantity - Actual quantity) x Standard price
$2,400 = (9,000 - 8,800) x Standard price
Therefore, the standard price is $1

The total direct materials budget variance formula is:
Actual quantity x (Actual price - Standard price)
$200 = 8,800 x (Actual price - $1)

Solving for Actual price, we get:
Actual price = $12.25

Vashon Corporation Had the Following Activity During a Recent Period