7-18Amalgamated 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 $1.50 per pound. The materials price and efficiency variances for the month of May were:

Price Variance

Efficiency Variance

a. $3,000 U

$1,500 F

b. $3,000 F

$0

c. $3,000 F

$1,500 U

d. $3,200 F

$1,500 U

7-19Atlantic 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

200 units

Actual quantity used

110 units

Units standard quantity

100 units

Actual price paid

$8 per unit

Standard price

$ 10 per unit

Atlantic isolates price variances at the time of purchase. What is the materials price variance for Year 1?

a.$400 favorable.

b.$400 unfavorable.

c.$220 favorable.

d.$220 unfavorable.