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Managerial Accounting

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Moderate

Calculating Material Variances for Fertilizer

MGRACT-V3J14R

TREX Corp makes fertilizer to sell to consumers and wholesalers. One batch of fertilizer requires 5,000 pounds of phosphate at a budgeted price of \$5.20 per pound. The company actually used 5,100 lbs in July and paid a \$26,265 for the phosphate. What was the price variance?

A

$255 Favorable

B

$520 Unfavorable

C

$265 Unfavorable

D

$255 Unfavorable