Question 1

Part 1

Chapman Inc. sells a single product, Zud, which has a budgeted selling price of $39 per unit and a budgeted variable cost of $27 per unit. Budgeted fixed costs for the year amount to $52,500. Actual sales volume for the year (62,000 units) fell 10,500 units short of budgeted sales volume. Actual fixed costs were $53,500. With everything else held constant, what impact did the shortfall in volume have on profitability for the year? (Indicate whether the effect was favorable or unfavorable in terms of its effect on operating income.)

Part 2

Actual purchase price per pound of direct materials	$	8.80
Standard direct materials allowed for units of product T produced		3,400	pounds
Decrease in direct materials inventory		230	pounds
Direct materials used in production		3,600	pounds
Standard price per pound of material	$	8.55

Required:

1. What was Steinbergs direct materials purchase-price variance and its direct materials usage variance for March? Indicate whether each variance was favorable (F) or unfavorable (U).

2. Prepare the appropriate journal entries for March.

What was Steinbergs direct materials purchase-price variance and its direct materials usage variance for March? Indicate whether each variance was favorable (F) or unfavorable (U). (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)