Ultimate Production Manufactures Radon Detectors

question 74

Multiple Choice

Ultimate Production manufactures radon detectors. The standards for materials for each detector is 2 pounds of acrylic at a standard cost of $4.30 per pound. During May, the company purchased 890 pounds and used 830 pounds of acrylic and made 410 radon detectors. The company paid $4.45 per pound for the acrylic. There were 400 detectors budgeted for May. How much is the material quantity variance?

• A) $134 unfavorable
• B) $43 unfavorable
• C) $177 unfavorable
• D) $263 unfavorable

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Definitions:

Inflation Rate

The percentage rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling, over a given period of time.

Purchasing Power

the value of currency expressed in terms of the amount of goods or services that one unit of money can buy.

Inflation

The rate at which the general level of prices for goods and services rises, eroding purchasing power.

Business Managers

Professionals responsible for planning, directing, and overseeing operations and employees within companies.