Question - Gumchara Corporation reported the following information with respect to the materials required to manufacture amalgam florostats during the current month:
Standard price per gram of material $4
Standard quantity of materials per amalgam florostat 5 grams
Actual materials purchased and used in production 6,000 grams
Actual amalgam florostats produced during the month 1,000 units
Actual cost of materials purchased $18,000
Normal monthly output 900 units
a. Determine Gumchara's materials price variance?
b. Determine Gumchara's materials quantity variance?
c. Will Gumchara's overhead volume variance be favorable or unfavorable? Why?