The Standard Materials Cost to Produce 1 Unit of Product

question 13

Multiple Choice

The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound.In manufacturing 8,000 units,47,000 pounds of material were used at a cost of $51 per pound.What is the total direct materials cost variance?

• A)$48,000 unfavorable.
• B)$51,000 favorable.
• C)$51,000 unfavorable.
• D)$3,000 favorable.
• E)$3,000 unfavorablE.

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Definitions:

Accounts Receivable Period

The mean duration that a company takes to collect payments from its customers for products or services provided on credit.

Cash Collection Period

The average period of time between when a sale is made on credit and when the payment is received.

Bank Deposit

Funds placed into a banking institution for safekeeping, which can include savings accounts, checking accounts, and certificates of deposit.

Inventory Cycle

The process or time frame from when inventory is acquired to when it is sold, highlighting inventory management efficiency.