Scotto Designs Has the Following Standards for the Production of Scarves

question 123

Multiple Choice

Scotto Designs has the following standards for the production of scarves: $\begin{array}{lcc}&\text { Standard Ouantity }&\text { Standard Price }\\\hline\text { Direct materials } & 1.2 \text { yards per scarf } & \$ 4.70 \text { per yard } \\\text { Direct labor } & 0.15 \text { hours per scarf } & \$ 11.00 \text { per hour }\end{array}$ The company used 985 yards of material in order to make 800 scarves in April. The company purchased 1,100 yards at $4.60 per yard. How much is the direct materials quantity variance?

• A) $110 favorable
• B) $118 unfavorable
• C) $8 unfavorable
• D) $705 unfavorable

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Definitions:

Poisson Approximation

A statistical technique used to estimate the probability of a given number of events happening in a fixed interval of time or space when these events occur with a known constant mean rate and independently of the time since the last event.

Probability

An indicator representing the probability or odds of a specific event happening, with its value ranging from 0 to 1.

Normal Model

A type of statistical distribution that is symmetric and describes how values are dispersed or spread around the mean.

Standard Deviations

Standard deviations measure the amount of variation or dispersion of a set of values from their mean, indicating how spread out the data points are.