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29 July, 14:39

JT Engineering usually pays $21 per pound of copper and uses 300 pounds of copper per 1,000 widgets. Due to the current high demand for copper, JT is currently paying $32 per pound of copper. What will JT's materials price variance be for this purchase? A : $3,300B : $3,200C : $1,300D : $2,100

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  1. 29 July, 17:57
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    A : $3,300

    Explanation:

    Given;

    Initial cost = $21 per pound of copper

    Current cost = $32 per pound of copper

    Cost variance = $32 - $21

    = $11

    If 300 pounds of copper per 1,000 widgets, then

    JT's materials price variance be for this purchase

    = Cost variance * Pound required

    = $11 * 300

    = $3,300

    The right answer is A : $3,300
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