Question: Variance Analysis Question Information
Standard quantity per unit of output - 7 pounds
Standard Price - $18 per pound
Actual Material Purchased - 6,200 pounds
Actual cost of materials purchased - $114,000
Actual material used in production - 5,700
Actual Output - 700 units
Questions:
A. What is the materials quantity variance for the month? Is it favorable or unfavorable?
B. What is the materials price variance for the month? Is it favorable or unfavorable?
C. What are the total materials spending variance? Is it favorable or unfavorable?
D. Give possible explanations for the variances.