Reference: 11-09
the Following Materials Standards Have Been Established for a Particular

question 70

Multiple Choice

Reference: 11-09
The following materials standards have been established for a particular product: $$\begin{array}{l}\begin{array} { | l | l | l | } \hline \text { Standard quantity per unit of output } & 6.8 & \text { metres } \\\hline \text { Standard price } & \$ 17.10 & \text { per metre } \\\hline\end{array}\\\text { The following data pertain to operations concerning the product for the last month: }\\\begin{array} { | l | l | l | } \hline \text { Actual materials purchased } & 9,000 & \text { metres } \\\hline \text { Actual cost of materials purchased } & \$ 156,600 & \\\hline \text { Actual materials used in production } & 8,500 & \text { metres } \\\hline \text { Actual output } & 1,200 & \text { units } \\\hline\end{array}\end{array}$$
-What is the materials price variance for the month?

• A)$2,550 F.
• B)$2,700 U.
• C)$2,700 F.
• D)$2,550 U.

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Definitions:

Significance Level

A threshold in hypothesis testing that defines the probability of rejecting a true null hypothesis, commonly denoted by alpha (α).

Test Statistic

A numerical value calculated from a sample used in statistical hypothesis testing to determine whether to reject the null hypothesis.

Normal Distribution

A probability distribution characterized by its symmetry surrounding the mean, demonstrating that data points close to the mean occur more frequently than those at a greater distance.

Degrees Of Freedom

Degrees Of Freedom represent the number of values in the final calculation of a statistic that are free to vary, often determining the shape of various sampling distributions.