Answer:
1.-3,120 Favorable variance.
2.$704Unfavorable variance
Explanation:
Material price variance:
Actual price is $0.28
Standard price 0.32
Actual quantity 78,000
Material price variance = (Actual price - Standard price) Actual quantity=
(0.28 - 0.32)*78,000
= (-0.04) 78,000= -3,120 Favorable variance.
2. Material quantity variance:
Actual quantity of material used (78,000 - 27,000) = 51,000
Standard quantity of material for the actual level of production (5,100 toys x 8 microns per toy) =48,800 toys
Standard price per unit of material = $0.32
Material quantity variance = (Actual quantity used - Standard quantity of material for actual level of production) Standard price
= (51,000 - 48,800)* $0.32
= (2,200) $0.32 = $704Unfavorable variance
