Ruby Company Produces a Chair That Requires 5 Yds

question 30

Essay

Ruby Company produces a chair that requires 5 yds. of material per unit. The standard price of one yard of material is $7.50. During the month, 8,400 chairs were manufactured, using 43,700 yards at a cost of $7.30 per yard. Determine the (a) price variance, (b) quantity variance, and (c) cost variance.

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Definitions:

LIFO

An accounting methodology where the most recently produced or acquired inventory items are recorded as sold first.

Physical Flow

The movement and management of materials and products from procurement through production and delivery to customers.