- April 28, 2020 at 5:38 pm
Question with solution:
I really didn’t understand this one. I just don’t get where I’m going wrong. Planning variance compares revised standards to standards, so I don’t really see why exactly we’d need to consider the actual price AP of horse hair per gram here.
The revised standard price for horse hair per gram is same as the original standard price for horse hair per gram, so I don’t really expect any price planning variance really.
Also, material price planning variance in particular is RSQ*RSP – RSQ*SP, where we have here RSQ=15g/unit*2,000units=30,000g, RSP=$0.25/g and SP=$0.25/g, so price planning variance comes to nil as I’d expect. Thanks.May 1, 2020 at 3:37 pm
Yes Im with you again – unless there is another part of the question hidden- like a part (b) or something else – it appears that the publisher has asked for a
PRICE planning variance
and not given a REVISED price for you.
Your understanding is 100% correct ( hope thats reassuring!)
As it stands here the material price planning variance is zero.
CathMay 1, 2020 at 4:02 pm
Thanks for the confirmation 🙂May 1, 2020 at 4:22 pm
Ok.- just writing this to close the question.( my comment needs to go last!) 🙂
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