Given an actual input price of $500, a budgeted input price of $300, and an actual input quantity of 50 units, what is the price variance?

Multiple choice question for Direct Cost Variances and Management Control. Select an option, then review the explanation below.

Explanation

Price variance is calculated by subtracting the budgeted price from the actual price and then multiplying by the actual quantity: (500 - 300) × 50 = 200 × 50 = $10,000.

Practice related questions from the same subject.

1.Within the hierarchy of costing and budgeting, which of the following represents a product sustaining cost?
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4.What term is used to describe the anticipated performance of a company?
5.Given that the actual labor cost is $1200 while the planned labor cost is $1000, what is the nature of the labor price variance?

Given an actual input price of $500, a budgeted input price of $300, and an actual input quantity of 50 units, what is the price variance?

Explanation

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