Graybeal Corporation makes a product with the followings standard costs:
Standard Quality or Hours Standard Price or Rate
Direct Material 4.3 ounces $6 per ounce
Direct Labour 0.7 hours $21 per Hour
The company reported the following results concerning this product in March
Actual Output 3500 units
Direct Material used in production 14710 ounces
Actual Direct Labour Hours 2270 Hours
Purchases of Direct Materials 16700 ounces
Actual Price of Direct Material $5.80 per ounce
Actual Direct Labour Rate $21.90 per hour
Required:
Compute the following Variances:
a. Materials Price b. Material Usage