W4 A3 4-6

4. Matt Company uses a standard cost system. Information for raw materials for Product RBI for the month of October follows: Standard price per pound of raw materials $1.60 Actual purchase price per pound of raw materials $1.55 Actual quantity of raw materials purchased 2000 pounds Actual quantity of raw material used 1900 pounds Standard quantity allowed for actual production 1800 pounds What is the materials purchase price variance? A.$90 favorable B.$90 unfavorable C.$100 favorable D.$100 unfavorable

5. When the material price variance is recorded at the time of purchase, raw materials are recorded as inventory at actual cost. True or False

6. Magno Cereal Corporation uses a standard cost system to collect costs related to the production of its "crunchy pickle" cereal. The pickle (materials) standards for each batch of cereal produced are 1.4 pounds of pickles at a standard cost of $3.00 per pound. During the month of August, Magno purchased 78,000 pounds of pounds at a total cost of $253,500. Magno used all of these pickles to produce 60,000 batches of cereal. What is Magno's materials quantity variance for the month of August? A.$1500 unfavorable B.$18,000 favorable C.$19,500 unfavorable D.$54,000 unfavorable