The standard cost of Product B manufactured by MIT Company includes 2.70 units of direct materials at $6.80 per unit. During June, 27,300 units of direct materials are purchased at a cost of $6.69 per unit, and 27,300 units of direct materials are used to produce 10,000 units of Product B.
a) Compute the total materials variance and the price and quantity variances.
Total materials variance
Materials price variance
Materials quantity variance
b) Compute the total materials variance and the price and quantity variances, assuming the purchase price is $6.87 and the quantity purchased and used is 26,700 units.
Total materials variance
Materials price variance
Materials quantity variance