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A company expects that it will use 10 pounds of materials for each unit of its product, and it expects that the cost of direct materials will be $12 per pound. During a month, the company purchased 81,000 pounds of material for $1,134,000 and used the 81,000 pounds of material to produce 9,000 units.
Question a. What is the company's direct material price variance for the month and indicate if it is favorable or unfavorable.
Question b. What is the company's direct materials quantity variance for the month and indicate if it is favorable or unfavorable.
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