McLuvin manufactures a chopping board, which requires an expensive hardwood. During a recent month, the company manufactured 3,300 chopping boards using 9,438 board feet of hardwood. The hardwood cost the company $19,819.8
The company's standards for one chopping board are 2.6 board feet of hardwood, at a cost of $2.2 per board foot.
Q1:
What cost for wood should have been incurred to make 3,300 chopping blocks?
Q2:
How much greater or less is this than the cost that was incurred? (In other words, cost incurred is less/greater by $___ than actual cost incurred.
Q3:
Break down the difference computed above into a materials price variance and a materials quantity variance.
Any tips/advice is much appreciated.
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