Question
Absolute Manipulation Manufacturing's (AMM) standards anticipate that there will be 5 pounds of raw material used for every unit of finished goods produced. AMM began
Absolute Manipulation Manufacturing's (AMM) standards anticipate that there will be 5 pounds of raw material used for every unit of finished goods produced. AMM began the month of May with 4,000 pounds of raw material, purchased 26,300 pounds for $21,040 and ended the month with 3,100 pounds on hand. The company produced 5,100 units of finished goods. The company estimates standard costs at $1.10 per pound. The materials price and efficiency variances for the month of May were as follows
1. Price Variance Efficiency Variance $7,890 U $1,870 F
2. Price Variance Efficiency Variance $7,890 F $1,870 U
3. Price Variance Efficiency Variance $8,160 F $1,870 U
4. Price Variance Efficiency Variance $7,890 F $0
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