Answer and Explanation:
The computation is shown below:
a. Material Price Variance is
= Actual Quantity Ă— (Actual Rate - Standard Rate)
= 6000 Ă— ($18000 Ă· 6000 - $4)
= $6,000 Favorable
b. Material Quantity Variance is
= Standard Rate Ă— (Actual Quantity - Standard Quantity)
= $4 Ă— (6000 - 5 Ă— 1000)
= $4,000 (Unfavorable)
c. It is favorable as actual production is more than the normal monthly output