Q32

Shoemaker Perkins Company uses a standard cost system and had 500 pounds of raw material X15 on hand on September 1. The standard cost of X15 is $10 per pound. The production standard calls for 2 pounds of material X15 for each unit of product manufactured. The company manufactured 700 units of the product in September, and had 700 pounds of material X15 in stock on September 30. The actual price for material X15 purchased during the month was $1 per pound below the standard cost. The material usage variance in September was $4,000 unfavorable. What is the purchase-price variance for material X15 in September?

Multiple Choice

• $2,000 favorable.

• $1,800 favorable.

• $1,600 favorable.

• $1,300 favorable.

• $1,400 favorable.