Exercise 11-7

Lawn uses a standard costing system. For production of a fuel cell, standards call for 4 model RN-3 valves per cell costing $2,160 each. During 2018, the company purchased 220 valves for $543,400. The company used 240 valves in the production of 58 fuel cells (8 valves were ruined through installation error).

Calculate material price and quantity variances for the model RN-3 valves.(Enter all variances as a positive number.)

Material Price Variance$

Unfavorable

Neither Unfavorable nor Favorable

Favorable

Material Quantity Variance$

Neither Unfavorable nor Favorable

Favorable

Unfavorable