In Command Ltd Completed Operations for the Week and the Accountant

question 120

Multiple Choice

In Command Ltd completed operations for the week and the accountant was preparing to make journal entries necessary to prepare a set of interim financial statements. Unfortunately, he discovered some of the data concerning direct materials had been lost. He was able to find the following: $$\begin{array} { l l } \text { Efficiency variance } & \$ 9,000 \text { Unfavourable } \\\text { Stardard price } & \$ 10 \text { per urit } \\\text { Actual units purchased } & 18,000 \\\text { Inventory decrease } & 1,000 \text { units } \\\text { Budget variance } & \$ 1,800 \text { Favourable }\end{array}$$ The standard cost of the direct materials used was:

• A) $90,000
• B) $191,000
• C) $180,000
• D) $94,000

---

Definitions:

Holding Cash

Maintaining a portion of one's assets in liquid cash form to meet immediate needs or prepare for future expenses or investment opportunities.

Total Costs

The complete amount of expenses incurred by a business or project, including both fixed and variable costs.

Money Market Instruments

Short-term financial instruments typically with high liquidity and very low risk.

Default Rates

The frequency at which borrowers fail to make payments on their loans or securities according to the terms agreed upon.