Leonesio Corporation Makes a Product That Uses a Material with the Following

question 104

Multiple Choice

Leonesio Corporation makes a product that uses a material with the following standards: The company budgeted for production of 3,100 units in August, but actual production was 3,200 units. The company used 27,600 kilos of direct material to produce this output. The company purchased 29,000 kilos of the direct material at a total cost of $118,900. The direct materials purchases variance is computed when the materials are purchased.
The materials quantity variance for August is:

• A) $5,576 F
• B) $5,576 U
• C) $5,440 F
• D) $5,440 U

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Definitions:

Surrogate Consumer

An individual who is hired or designated to make purchasing decisions on behalf of another person.

Ultimate User

The final consumer who uses a product or service for its intended purpose, as opposed to those who may purchase for resale or as intermediaries.

Interior Designer

A professional who plans, researches, coordinates, and manages the enhancement of interior spaces to achieve aesthetically pleasing environments.

Market Maven

An individual recognized for their knowledge about the marketplace, including where to get products at the best prices, and who influences others with their recommendations.