7-18, 7-20

7-18 Amalgamated Manipulation Manufacturing's (AMM) standards anticipate that there will be 3 pounds of raw material used for every unit of finished goods produced. AMM began the month of May with 5,000 pounds of raw material, purchased 15,000 pounds for $19,500 and ended the month with 4,000 pounds on hand. The company produced 5,000 units of finished goods. The company estimates standard costs at S1.50 per pound. The materials price and efficiency variances for the month of May were: Price Variance 1. $3,000 U 2. S3,000 F 3. $3,000 F . $3,200 F Efficiency Variance $1,500 F $1,500 U $1,500 U 7-19 Atlantic Company has a manufacturing facility in Brooklyn that manufactures robotic equipment for the auto industry. For Year 1, Atlantic collected the following information from its main production line: Actual quantity purchased Actual quantity used Units standard quantity Actual price paid Standard price 200 units 110 units 100 units S 8 per unit S 10 per unit Atlantic isolates price variances at the time of purchase. What is the materials price variance for Year 1? 1. $400 favorable 2. $400 unfavorable. 3. $220 favorable 4. $220 unfavorable. 7-20 Basix Inc. calculates direct manufacturing labor variances and has the following information: Actual hours worked: 200 Standard hours: 250 Actual rate per hour: $12 Standard rate per hour: $10 Given the information above, which of the following is correct regarding direct manufacturing labor variances? a. b. c. d. The price and efficiency variances are favorable. The price and efficiency variances are unfavorable. The price variance is favorable, while the efficiency variance is unfavorable. The price variance is unfavorable, while the efficiency variance is favorable