In Command Ltd Completed Operations for the Week and the Accountant

question 37

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: $$\begin{array} { l l } \text { Efficiency variance } & \$ 9,000 \text { Unfavourable } \\\text { Stardard price } & \$ 10 \text { per unit } \\\text { Actual units purchased } & 18,000 \\\text { Inventory decrease } & 1,000 \text { units } \\\text { Budget variarice } & \$ 1,800 \text { Favourable }\end{array}$$ The standard quantity of direct materials allowed for the month was:

• A) 17,100
• B) 9,000
• C) 17,000
• D) 9,550

---

Definitions:

Sales

The total income generated from goods or services sold by a company before any costs or expenses are deducted.

Stockholders' Equity

The residual interest or ownership of a company's shareholders after all liabilities have been deducted from total assets.

Net Operating Income

The income generated from normal business operations after subtracting operating expenses from operating revenues but before taxes and interest.

Traceable Fixed Expenses

Fixed costs that can be directly linked to a specific business segment or product, aiding in profitability analysis.