Miguez Corporation Makes a Product with the Following Standard Costs

question 226

Multiple Choice

Miguez Corporation makes a product with the following standard costs: The company budgeted for production of 2,600 units in September, but actual production was 2,500 units. The company used 5,440 liters of direct material and 1,680 direct labor-hours to produce this output. The company purchased 5,800 liters of the direct material at $7.20 per liter. The actual direct labor rate was $24.10 per hour and the actual variable overhead rate was $1.90 per hour.
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The materials price variance for September is:

• A) $1,150 U
• B) $1,150 F
• C) $1,160 F
• D) $1,160 U

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Definitions:

Short-term Objectives

Goals or targets that are intended to be achieved in the near future.

Nominal Group

A structured form of brainstorming that involves individuals generating ideas independently before sharing them with the group to prioritize or make decisions.

Cooperative Group

is a group of individuals who work together to achieve common goals or complete tasks.

Competitive Group

A group structured around achieving objectives in a manner that involves rivalry or competition among its members.