Answer:
Price variance = $330 Favorable
Usage variance = $90 Unfavorable
Explanation:
Formula approach
<em>Material price variance</em>
$(0.045-0.042)× 110,000 = $330 Favorable
Material Usage Variance
(110,000)-(0.45×240,000) × 0.045 = $90 unfavorable
Columnar Approach
Price variance $
Standard cost (0.045 × 110,000 ) = 4950
Actual cost (0.042 × 110,000 ) = <u>4620</u>
Variance 330 Favorable
Usage Variance
Ounce
Standard quantity (0.45×240,000) = 108000
Actual quantity <u>110,000</u>
Variance in ounce 2000 unfavourable
× Standard price <u>0.045 </u>
Variance <u> $90 Unfavorable</u>