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Managerial Accounting

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Calculating Material Variances for Coffee

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Java Corp makes coffee to sell to wholesalers and consumers. One shipment of coffee requires 6,000 pounds of coffee beans at a budgeted price of \$5.50 per pound. The company actually purchased 5,900 lbs in July and paid a \$32,745 for plastic. What is the spending variance?

A

$550 Favorable

B

$295 Unfavorable

C

$295 Unfavorable

D

$255 Favorable