Acme Brick Company Uses the Following Rule to Determine Whether

question 119

Essay

Acme Brick Company uses the following rule to determine whether materials usage variances should be investigated:
A materials usage variance will be investigated when the variance is greater than either $5,000 or 10 percent of the standard cost.
During June,the company purchased and used 9,500 pounds of concrete for $5 per pound.It was able to make 20,000 bricks.Its standard quantity of materials allowed is 0.45 pound of concrete per brick at a standard price of $6 per pound.

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Definitions:

Total Asset Turnover

A financial ratio that measures a company's ability to generate sales from its assets, calculated as sales divided by total assets.

Common Stock

A type of equity ownership in a corporation, representing a claim on a portion of the profits and assets.

Market Price

The current price at which an asset or service can be bought or sold in a given market.

Average Sale Period

The average time it takes for a company to complete a sales cycle from initial contact to closing the sale.