Diamond Company produces a chair that requires 5 yds. of material per unit. The standard price of one yard of material is $7.50. During the month, 8,500 chairs were manufactured, using 43,700 yards at a cost of $7.60. Determine the (a) price variance, (b) quantity variance, and (c) cost variance.

To determine the price variance, quantity variance, and cost variance, we need to understand the formulas for each of them.

(a) Price Variance:
The price variance measures the difference between the actual price of the material and the standard price, multiplied by the actual quantity used.

Formula for price variance:
Price Variance = (Actual Price - Standard Price) * Actual Quantity

(b) Quantity Variance:
The quantity variance measures the difference between the actual quantity of material used and the standard quantity of material, multiplied by the standard price.

Formula for quantity variance:
Quantity Variance = (Actual Quantity - Standard Quantity) * Standard Price

(c) Cost Variance:
The cost variance is the sum of the price variance and the quantity variance.

Formula for cost variance:
Cost Variance = Price Variance + Quantity Variance

Now, let's calculate each variance using the given information:

(a) Price Variance:
Standard price of 1 yard of material = $7.50
Actual price of 1 yard of material = $7.60
Actual quantity used = 43,700 yards

Price Variance = ($7.60 - $7.50) * 43,700
Price Variance = $0.10 * 43,700
Price Variance = $4,370

(b) Quantity Variance:
Standard quantity per unit = 5 yards
Actual quantity used = 43,700 yards
Number of chairs manufactured = 8,500 chairs

Standard quantity = Standard quantity per unit * Number of chairs
Standard quantity = 5 yards * 8,500 chairs
Standard quantity = 42,500 yards

Quantity Variance = (43,700 - 42,500) * $7.50
Quantity Variance = 1,200 * $7.50
Quantity Variance = $9,000

(c) Cost Variance:
Cost Variance = Price Variance + Quantity Variance
Cost Variance = $4,370 + $9,000
Cost Variance = $13,370

Therefore:
(a) The price variance is $4,370.
(b) The quantity variance is $9,000.
(c) The cost variance is $13,370.