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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.
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