PURE Inc. produces flavored waters, sold in gallons. Recently the company adopted the following materials standard for one gallon of its raspberry flavored water:

Direct materials (90 oz. @ $0.08)$ 7.20

During the first month of operations the company experienced the following results:A. Gallon units produced: 80,000B. Ounces of materials purchased and used: 7,320,000 ounces at $0.07C. No beginning or ending inventories of raw materials

Required:A. Compute the materials price variance indicating if it is favorable or unfavorable.B. Compute the materials usage variance indicating if it is favorable or unfavorable.