Accounting · Variance Analysis
KW Co manufactures a single product L, for which the standard material cost is 14 kg × $3 = $42 per unit. During July, 800 units of L were manufactured. 12,000 kg of material were purchased for $33,600, of which 11,500 kg were issued to production. The company values all inventory at standard cost. What are the material price and usage variances for July?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Price: $2,400 (Favorable); Usage: $840 (Adverse)
- 2Price: $2,300 (Favorable); Usage: $900 (Adverse)
- 3Price: $2,400 (Favorable); Usage: $300 (Adverse)
- 4Price: $2,400 (Favorable); Usage: $900 (Adverse)✓
Correct answer
Price: $2,400 (Favorable); Usage: $900 (Adverse)
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