Answer :
Price variance = $2960 Unfavorable
Quantity variance = $1600 favorable
Hence option "A" and "D" both are correct.
What is price variance ?
Price variance (Vmp) may be a term employed in accounting that denotes the distinction between the expected value of an item (standard value) and also the actual cost at the time of purchase. the value of an item is commonly tormented by the amount of things ordered, and this can be taken into thought. A value variance implies that actual prices might exceed the budgeted value, that is usually not fascinating. this can be necessary once firms square measure deciding what quantities of An item to get. When the particular Materials value is beyond the quality Materials value, the variance is claimed to be unfavorable, since the particular value paid on materials purchased is larger than the allowed commonplace.
Calculation:
Price variance = ( SR - AR) × Actual hours = (8 - 8.20) × 14800 = $2960 Unfavorable
Quantity variance = (SH- AH) × SR = (15000 - 14800) × $8 = $1600 favorable
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