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?