Precision Tools Inc. has the following informationrelated to its direct materials usage:Standard Quantity: 120,000 unitsActual Quantity: 140,000 unitsStandard Price: $2.50 per unitActual Price: $2.80 per unitA. Calculate the materials price variance and statewhether it is favorable or unfavorable.B. Calculate the materials usage variance and statewhether it is favorable or unfavorable.

Step 1: Definition of Materials Price and Usage VarianceMaterials Price Variance (MPV):Materials…

Answered: Precision Tools Inc. has the following…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 12EA: Acme Inc. has the following information available: A. Compute the material price and quantity, and...

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