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Luxury Bird Homes Inc. manufactures a number of bird feeders for general household and backyard use. One of these products, a rustic bird feeder, requires an expensive hardwood. During a recent month, the company manufactured 9,000 rustic bird feeders using 6,200 meters of hardwood. The hardwood cost the company $23,560. The company's standards for one rustic bird feeder are 0.6 meters of hardwood, at a cost of $4.05 per meter.
Required:
Problem 1) What cost for wood should have been incurred to make 9,000 rustic bird feeders? How much greater or less is this than the cost that was incurred?
Problem 2) Break down the difference computed in (1) above into a materials price variance and a materials quantity variance.
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