Question

At Frigicor, the standard price for the M640 electrical relay (a component used in the production of a commercial refrigeration unit) is $65. Standards call for two relays per unit of finished product. In July, the company purchased 120 relays for $7,560. The Company used 104 relays in the production of 50 refrigeration units (4 relays were damaged in the installation process).

Required
Calculate the material price variance and the material quantity variance related to the M640 electrical relay. Indicate whether the variances are favorable or unfavorable.



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  • CreatedSeptember 23, 2013
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