Calculate the material price variance

Assignment Help Accounting Basics

Reference no: EM133612258

Question: Standard Costing XYZ Company produces a compound by mixing three gallons of AB-5 (costing $2.25 per gallon) and four gallons of CR-3 (costing $7.50 per gallon). The output is five gallons of the compound. During August, 21,000 gallons of AB-5 costing $46,500 were purchased and used; 26,000 gallons of CR-3 costing $198,000 were purchased and used. A total of 37,000 gallons of output were obtained. Label all variances as favorable or unfavorable.

Required: 1. Calculate the material price variance. 2. Calculate the materials efficiency variance.

Reference no: EM133612258

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