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Question - At Marshall, the standard price for the M640 electrical relay (a component used in the production of a commercial refrigeration unit) is $62. Standards call for 2.0 relays per unit of finished product. In July, the company purchased 161 relays for $9,177. The company used 100 relays in the production of 48 refrigeration units (4 relays were damaged in the installation process).
Required - Calculate the material price variance and the material quantity variance related to the M640 electrical relay. Indicate whether the variances are favorable or unfavorable.
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