Tarptent manufactures camping tents from a light weight synthetic fabric. Assume the company's two-person tent has a standard material cost of $60, consisting of 5 yards of fabric at $15 per yard. The standards call for 1.4 hours of assembly at $20 per hour. The following data were recorded for October, the first month of operations: Fabric purchased Fabric used in production of 1,200 tents Direct labor used 6,500 yards X $16.00 per yard 4,850 yards 1,850 hours X $19.60 per hour Compute the materials price variance Ⓒa. $5,000 (F) O b. $2,425 (F) Oc. $4,850 (U) Od. $3,250 (U)

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Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance. 

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.