Ruby Company produces a chair that requires 5 yards of material per unit. The standard price of one yard of material is $7.50. During the month, 8,400 chairs were manufactured, using 43,700 yards at a cost of $7.30 per yard. Enter favorable variances as negative numbers.

CALCULATE MATERIAL VARIANCES :

MATERIAL PRICE VARIANCE

           (7.5-7.30)43700    8740    (FAVORABLE)  

(STANDARD PRICE-ACTUAL PRICE) ACTUAL QUANTITY

MATERIAL QUANTITY VARIANCE

            (8400*5-43700)*7.512750   (UNFAVORABLE )

(STANDARD QUANTITY-ACTUAL QUANTITY) STANDARD RATE

COST VARIANCE

(STANDARD COST-ACTUAL COST)

(8400*5*7.5-43700*7.3)4010      (UNFAVORABLE )      

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