Shawn Incorporated Planned to Produce 3,000 Units of Its Single

question 49

Multiple Choice

Shawn Incorporated planned to produce 3,000 units of its single product, Megatron, during November. The standard specifications for one unit of Megatron include six pounds of material at $0.30 per pound. Actual production in November was 3,100 units of Megatron. The accountant computed a favorable materials price variance of $380 and an unfavorable materials quantity variance of $120. Based on these variances, one could conclude that: (CMA adapted)

• A) more materials were purchased than were used.
• B) more materials were used than were purchased.
• C) the actual cost of materials was less than the standard cost.
• D) the actual usage of materials was less than the standard allowed.

---

Definitions:

Consumer's Income

The total amount of income a person earns from work, investments, and other sources, influencing their purchasing power and demand for goods.

Process Innovation

Process innovation involves improvements in the methods or technologies used to produce goods and services, enhancing efficiency or reducing costs.

New Products

Items that have been recently developed or introduced to the market, offering new features or benefiting from recent technological advancements.

Producing Products

The process of creating goods or services to be sold to consumers involving stages from design to manufacturing.