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The standards for a product call for 2.5 pounds of a raw material that costs $6.10 per pound. Last month, 30,000 pounds of the raw material were purchased for $187,500. The actual output of the month was 9,000 units of the product. A total of 22,200 pounds of the raw material were used to produce this output.
Required:
a. What is the materials price variance for the month?
b. What is the materials quantity variance for the month?
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In your opinion, discuss the most important principles in provider profiling in health plans.
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