5.

Adams Company has two products: A and B. The annual production and sales of Product A is 2,100 units and of Product B is 1,500 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.5 direct labor-hours per unit and Product B requires 0.8 direct labor-hours per unit. The total estimated overhead for next period is $103,275. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools--Activity 1, Activity 2, and General Factory--with estimated overhead costs and expected activity as follows:

Total	Estimated Overhead Costs	Expected Activity
		Product A	Product B	Total
Activity 1	$31,912	1,400	1,000	2,400
Activity 2	18,176	2,100	600	2,700
General Factory	53,187	1,050	1,200	2,250
Total	$103,275

(Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor-hours.)

The overhead cost per unit of Product B under the traditional costing system is closest to:

$36.72

$12.13

$14.31

$24.59

4. The following materials standards have been established for a particular product:

Standard quantity per unit of output	3.0	grams
Standard price	$13.00	per grams

The following data pertain to operations concerning the product for the last month:

Actual materials purchased	1,800	grams
Actual cost of materials purchased	$ 20,970
Actual materials used in production	1,100	grams
Actual output	340	units

The direct materials purchases variance is computed when the materials are purchased.

Required:
a.	What is the materials price variance for the month? (Input the amount as a positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.)

b.	What is the materials quantity variance for the month? (Input the amount a as positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.)