Bracey Company's standard cost per unit of component part K-45 is $4. During the month, 6,000 units of K-45 were purchased at a total cost of $25,200. In addition, 7,100 units of K-45 were used during the month; however, the standard quantity allowed for actual production is 6,900 units.
Required:
(1) Compute the materials purchase price variance and the materials quantity variance, and indicate whether the variances are favorable or unfavorable.
(2) Assume materials are inventoried at actual cost and the beginning inventory of K-45 contained 2,000 units at a total cost of $8,240. Compute the materials price usage variance assuming the average cost method is used for materials inventory.
(3) Assume the facts from requirement 2, except the company uses the fifo method for materials inventory. Compute the materials price usage variance.
(4) Assume the facts from requirement 2, except the company uses the lifo method for materials inventory. Compute the materials price usage variance.