|
Standard
|
Lbs Standard
|
|
|
Material
|
Quantity (lbs)
|
Cost/Lb
|
Total Cost
|
|
O
|
0
|
$0.10
|
$0
|
|
H
|
80
|
$0.08
|
$6.40
|
|
M
|
120
|
$0.02
|
$2.40
|
|
200
|
|
$8.80
|
A company makes a product using two materials, one of which is interchangeable with a third material. The standards for producing one 200-pound batch are presented below. The last 200-pound batch was produced using 140 pounds of M and 90 pounds of O. The price of M was $.03 per pound and the actual price of O was $.10. Is the materials mix variance favorable or unfavorable?