2. Marks Company makes one product, for which it has established the following standards for materials:

Average quantity of material per unit of product: 4.5 pounds

Price per pound of materials: $16

During March, Marks made 10,000 units of the product, using 50,000 pounds at a total purchase price of $825,000.

Required:

(a) Determine the total flexible budget materials variance and indicate whether it is favorable or unfavorable.

(b) Calculate the materials price variance and indicate whether it is favorable or unfavorable.

(c) Determine the materials usage variance and indicate whether it is favorable or unfavorable.

Answer:

(a) Flexible budget materials variance:

(b) Materials price variance:

(c) Materials usage variance: