Todco planned to produce 3,000 units of its single product, Teragram, during Nov

Question

Todco planned to produce 3,000 units of its single product, Teragram, during November. The standard specifications for one unit of Teragram include six pounds of material at $0.30 per pound. Actual production in November was 3,100 units of Teragram. The accountant computed a favorable materials purchase price variance of $380 and an unfavorable materials quantity variance of $120. Based on these variances, one could conclude that:

A. more materials were purchased than were used.
B. more materials were used than were purchased.
C. the actual cost of materials was less than the standard cost.
D. the actual usage of materials was less than the standard allowed.

Explanation / Answer

Hi, If you like my answer rate me first...that way only I can earn points. Thanks See total favorable price variance = $260, So, C. the actual cost of materials was less than the standard cost.

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