The standard cost of product B manufactured by Bhaskara Company includes two units of direct materials at $4.00 per unit. During June, the company purchases 27,000 units of direct materials at a cost of $3.80 per unit and uses 27,000 units of direct materials to produce 13,000 units of product B.
Instructions
(a) Calculate the materials variance, and the price and quantity variances.
(b) Repeat (a), assuming the purchase price is $4.20 and the quantity purchased and used is 25,200 units.