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Indicate whether the variances are favorable

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Reference no: EM13960509

At Frigicor, the standard price for the M640 electrical relay (a component used in the production of a commercial refrigeration unit) is $65. Standards call for two relays per unit of finished product. In July, the company purchased 120 relays for $7,560. The Company used 104 relays in the production of 50 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. 

Reference no: EM13960509

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