Varney Corporation Uses a Solvent in Its Manufacturing Process

Multiple Choice

Varney Corporation uses a solvent in its manufacturing process. The standard price established for the solvent is $2 per liter. A variance analysis for last month revealed an unfavorable price variance of $8,000 related to the purchase of 40,000 liters of this particular solvent. What actual price per liter did Varney pay for its purchases of the solvent last month?

A) $1.80
B) $0.20
C) $2.20
D) $2.00