Variance Analysis Question Information:
Standard quantity per unit of output - 7 pounds
Standard Price - $18 per pound
Actual Material Purchased - 6,200 pounds
Actual cost of materials purchased - $114,000
Actual material used in production - 5,700
Actual Output - 700 units
Questions:
- What is the materials quantity variance for the month? Is it favorable or unfavorable?
- What is the materials price variance for the month? Is it favorable or unfavorable?
- What are the total materials spending variance? Is it favorable or unfavorable?
- Give possible explanations for the variances?