Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 31

Refer to Exhibit 14.8 and the accompanying discussion in the text. Demonstrate that the purchase price variance for PVC during 2010 was $720U.

Step 1 of 2

Purchase price variance is the difference between the actual purchase price minus the budgeted purchase price multiplied by purchase quantity. F signifies that the result is favorable and U signifies that result is unfavorable.