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Material Price Variances and Materials Quantity Variances help? Luc, Inc., manufactures a single...

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Accounting

Material Price Variances and Materials Quantity Variances help?

Luc, Inc., manufactures a single product. The company uses a standard cost system and has

established the following direct material standards for one unit of product:

Direct materials ................ 2 pounds (standard quantity) ; $4 per pound (standard price)

During March, the following activity was recorded by the company: - The company produced 4,000 units during the month, which was 500 less than budgeted. - A total of 10,000 pounds of material were purchased at a cost of $38,000. - There was no beginning inventory of materials on hand to start the month; at the end of the month, 3,000 pounds of material remained in the warehouse.

a. The materials price variance for March is (indicate amount and if variance is favorable or unfavorable) : _______________________

b. The materials quantity variance for March is (indicate amount and if variance is

favorable or unfavorable) : ________________

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