Krumple Inc. produces aluminum cans. Production of 12-ounce cans has a standard unit quantity of 4.7 ounces of aluminum per can. During the month of April, 450,000 cans were produced using 1,875,000 ounces of aluminum. The actual cost of aluminum was $0.10 per ounce and the standard price was $0.08 per ounce. There are no beginning or ending inventories of aluminum.

Required:Calculate the total variance for aluminum for the month of April. Enter amount as a positive number and select Favorable or Unfavorable.

-$18,300 (Unfavorable)

Explanation:

Material price per variance:

= Ounces of aluminium used in production (Standard price - Actual cost per ounce)

= 1,875,000 ($0.08 - $0.10)

= 1,875,000 * (-$0.02)

= - $37,500 (Unfavorable)

Material usage variance:

= [ (Cans produced * Standard unit quantity) - Ounces of aluminium used in production] * Standard price

= [ (4,50,000 * 4.7) - 1,875,000] * 0.08

= $19,200 (Favorable)

Therefore,

Total variance = Material price per variance + Material usage variance

= - $37,500 + $19,200

= - $18,300 (Unfavorable)