Reference no: EM132319391
Question
1. Amalgamated Manipulation Manufacturing's (AMM) standards anticipate that there will be 3 pounds of raw material used for every unit of finished goods produced. AMM began the month of May with 5,000 pounds of raw material, purchased 15,000 pounds for $19,500 and ended the month with 4,000 pounds on hand. The company produced 5,000 units of finished goods.
The company estimates standard costs at $1.50 per pound. The materials price and efficiency variances for the month of May were:
Price Variance Efficiency Variance
a. $3,000 U $1,500 F
b. $3,000 F $ 0
c. $3,000 F $1,500 U
d. $3,200 F $1,500 U
2. Atlantic Company has a manufacturing facility in Brooklyn that manufactures robotic equipment for the auto industry. For Year 1, Atlantic collected the following information from its main production line:
Actual quantity purchased 200 units
Actual quantity used 110 units
Units standard quantity 100 units
Actual price paid $ 8 per unit
Standard price $ 10 per unit
Atlantic isolates price variances at the time of purchase. What is the materials price variance for Year 1?
a. $400 favorable.
b. $400 unfavorable.
c. $220 favorable.
d. $220 unfavorable.