Problem:
The following standards have been established for a raw material used to make product I 98:
Standard quantity of the material per unit of output 4.5 pounds
Standard price of the material $ 13.90 per pound
The following data pertain to a recent month's operations:
Actual material purchased 2,000 pounds
Actual cost of material purchased $26,200
Actual material used in production 1,300 pounds
Actual output 220 units of product I 98
A- What is the materials price variance for the month?
B- What is the materials quantity variance for the month?