Calculate the Materials Price Variance

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Problem - The Play Some More Company produces toys for national distribution.

Standards for a particular toy are: Materials: 12 grams per unit at 56 cents per gram.

During the month of May, the company produced 1,000 units. Information for the month follows: Materials: 14,000 grams were purchased and used at a total cost of $7,140.

a) Calculate the Materials Price Variance and state if it is Favourable or Unfavourable.

b) Calculate the Materials Quantity Variance and state if it is Favourable or Unfavourable.

c) State one reason why these variances would be Favourable or Unfavourable.

Reference no: EM132613241

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