aterials Variances

Manzana Company produces apple juice sold in gallons. Recently, the company adopted the following material standard for one gallon of its apple juice:

Direct materials 128 oz. @ $0.05 = $6.40

During the first week of operation, the company experienced the following results:

1. Gallon units produced: 20,000.
2. Ounces of materials purchased and used: 2,650,000 ounces at $0.045.
3. No beginning or ending inventories of raw materials.

Required:

1.Compute the materials price variance.

Favorable or Unfavorable

2.Compute the materials usage variance.

$Unfavorableor favorable