Gipple Corporation Makes a Product That Uses a Material with the Quantity

question 126

Multiple Choice

Gipple Corporation makes a product that uses a material with the quantity standard of 7.3 grams per unit of output and the price standard of $6.00 per gram. In January the company produced 3,400 units using 24,870 grams of the direct material. During the month the company purchased 27,400 grams of the direct material at $6.10 per gram. The direct materials purchases variance is computed when the materials are purchased. The materials price variance for January is:

• A) $2,482 F
• B) $2,740 U
• C) $2,482 U
• D) $2,740 F

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Definitions:

Price Controls

Government-imposed limits on the prices that can be charged for goods and services in a market, aiming to keep prices within a certain range.

Exports

Goods or services sent from one country to another for sale or trade.

Marketing Boards

Organizations that control the supply or pricing of certain agricultural products in various countries.

Developing Nations

Countries with a less developed industrial base and a lower Human Development Index compared to more developed countries.