The Following Standards Have Been Established for a Raw Material

Essay

The following standards have been established for a raw material used in the production of product U98:
$\begin{array}{llcc} \text {Standard quantity of the material per unit of output } & \text { 2.6pounds } \\ \text { Standard price of the material} & \text { \$ 14.50 Per pound} \\\end{array}$


The following data pertain to a recent month's operations:
$$\begin{array} { ll } \text { Actual material purchased } & 7,606 \text { Pounds } \\\text { Actual cost of material purchased } & \$ 110,960\\\text { Actual material used in production } & 7,300 \mathrm { Pounds } \\\text { Actual output } & 2,800 \text { units of product U98 }\end{array}$$
Required:
a. What is the materials price variance for the month?
b. What is the materials quantity variance for the month?
c. Prepare journal entries to record the purchase and use of the raw material during the month. (All raw materials are purchased on account.)