The Bach Company provides the following standard and actual cost relating to material price and labor usage.Based on the above information, which statement is correct? $\begin{array}{lll}\text { Item to Classify }&\text {Standard}&\text { Actual }\
\text { Materials Price } & 8.50 \text { per gallon } & 8.35 \text { per gallon } \
\text { Labor Usage } & 30,000 \text { hours } & 28.500 \text { hours }
\end{array}$
A)Both the material price variance and the labor usage variance are unfavorable.
B)Both the materials price variance and the labor usage variance are favorable.
C)The labor usage variance is unfavorable.
D)The materials price variance is unfavorable.

Question

Quizplus · Accepted Answer

The materials price variance is favorable because the actual price is lower than the standard price. The labor usage variance is also favorable because the actual hours used are lower than the standard hours allowed.

The Bach Company Provides the Following Standard and Actual Cost