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Managerial Accounting

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Calculating Material Variances for Circuit Boards

MGRACT-EVEEHX

Gemtron Corp makes circuit boards to sell to electronics companies. One shipment of circuit boards requires 4,000 pounds of plastic at a budgeted price of \$4.50 per pound. The company actually purchased 4,100 lbs in May and paid \$19,270 for plastic. What is the materials price variance?

A

$450 Favorable

B

$820 Unfavorable

C

$1270 Favorable

D

$450 Unfavorable