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Question - Each unit of product should use 2 kg of material A, the price of which should be $2.1 per kg. The number of units produced is 8,000. 15,800 kg of material A is used and the price paid is $2.2 per kg. Calculate the price and quantity variances.
a. Price variance: $1,600 favourable Quantity variance: $440 unfavourable
b. Price variance: $1,580 favourable Quantity variance: $420 unfavourable
c. Price variance: $1,600 unfavourable Quantity variance: $440 favourable
d. Price variance: $1,580 unfavourable Quantity variance: $420 favourable
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