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Lata Inc. produces aluminum cans. Production of 12-ounce cans has a standard unit quantity of 4.5 ounces of aluminum per can. During the month of
Lata Inc. produces aluminum cans. Production of 12-ounce cans has a standard unit quantity of 4.5 ounces of aluminum per can. During the month of April, 300,000 cans were produced using 1,250,000 ounces of aluminum. The actual cost of aluminum was $0.09 per ounce and the standard price was $0.08 per ounce. There are no beginning or ending inventories of aluminum.
Required:
1. Calculate the total variance for aluminum for the month of April.
2. Favorable or Unfavorable?
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