Tommy's Toys produces two types of toys: trains and dolls. Tommy's uses stainless steel to manufacture the trains and plastic to manufacture the dolls. Information regarding the usage of steel and plastic for the past year follows:
Product Names: Steel, Plastic
Direct materials information:
Standard pounds per unit: 2 lb., 1.5 lb.
Standard Price (SP) per pound: $2.75, ?
Actual Quantity (AQ) used per unit: 2.5 lbs., 3.00 lbs.
Actual Price (AP) paid for material: $1.50, $4.00
Actual Quantity Purchased (AQP) and used: 2,100 lbs., 1,000 lbs.
Price variance: ?, $3,250 F
Quantity variance: $309 U, ?
Flexible budget variance: ?, $2,519 F
Number of units produced: 225, 650
What is the price variance for steel used to manufacture the trains?
a) $4,162.50 favorable
b) $4,162.50 unfavorable
c) $4,400 favorable
d) $4,400 unfavorable