Answer:
a.) Material price variance = 8,827 favorable
b.) Material Quantity variance = 12,033 favorable
Explanation :
a.) Since in the question the actual price is not given. So we have to first compute the actual price which is shown below.
= Actual cost of material purchased ÷ Actual material purchased
= $182,700 ÷ 9,100 meters
= $20.07
The equation for computing material price variance is shown below:
= Actual Quantity × ( Actual Price - Standard Price )
= 9,100 × ($20.07 - $19.10)
= 8,827 favorable.
b.) Since the standard quantity is not given in the question.
So, Standard quantity = Actual output × Standard quantity per unit of output
= 1,540 × 5.5
= 8,470
Calculation of materials quantity variance for the month is displayed below:
= Standard Price × (Actual Quantity - Standard Quantity)
= $19.10 × (9,100 - 8,470)
= 12,033 favorable
Here, favorable means that actual cost is higher than standard cost.
Thus, material price variance and materials quantity variance is 8,827 favorable and 12,033 favorable.
