# Question

Gumchara Corporation reported the following information with respect to the materials required to manufacture amalgam florostats during the current month:
Standard price per gram of materials . . . . . . . . . . . . . . . . . . . . . . . . \$1.25
Standard quantity of materials per amalgam florostat . . . . . . . . . . . 4 grams
Actual materials purchased and used in production . . . . . . . . . . 2,800 grams
Actual amalgam florostats produced during the month . . . . . . . . . . 520 units
Actual cost of materials purchased . . . . . . . . . . . . . . . . . . . . . . . . . . \$3,920
Normal monthly output . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 550 units

a. Determine Gumchara’s materials price variance.
b. Determine Gumchara’s materials quantity variance.
c. Will Gumchara’s overhead volume variance be favorable or unfavorable? Why?

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