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What is the materials price variance for year 1

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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.

Reference no: EM132319391

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