Answer:
AQ = Actual quantity = 20,000 pounds
AP = Actual price = $2.35 per pound.
SQ = Standard quantity = 4,000 units*4.6 pounds per unit = 18,400 pounds
SP = Standard price = $2.50 per unit
AH = Actual hours = 750 hours.
AR = Actual rate = Total actual cost/Actual hours = $14,925/750 hours = $19.90.
SH= Standard hours = 0.2 hours per unit*4,000 units = 800 hours.
SR = Standard rate = $18 per hour
Materials price variance = (AQ *AP) - (AQ *SP) =
Materials price variance = (20,000*$2.35) - (20,000 *$2.50)
Materials price variance = $47,000 - $50,000
Materials price variance = $3,000 (F)
Material quantity variance = (AQ*SP) - (SQ*SP)
Material quantity variance = (20,000*$2.50) - (18,400*$2.50)
Material quantity variance = $50,000 - $46,000
Material quantity variance = $4,000 (U)
