Reference no: EM132610297

The Alpha Company produces toys for national distribution. Standards for a particular toy are:

Materials: 12 grams per unit at 56′ per gram.

Labour: 2 hours per unit at $2.75 per hour.

During the month of December, 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.

Labour: 2,500 hours worked at a total cost of $8,000.

Problem 1: What was the materials price variance?

A) $420 favourable.

B) $420 unfavourable.

C) $700 unfavourable.

D) $700 favourable.