Reference: 11-08
the Following Materials Standards Have Been Established for a Particular

question 95

Multiple Choice

Reference: 11-08
The following materials standards have been established for a particular product: $$\begin{array}{l}\begin{array} { | l | l | l | } \hline \text { Standard quantity per unit of output } & 1.9 & \text { grams } \\\hline \text { Standard price } & \$ 18.00 & \text { per gram } \\\hline\end{array}\\\text { The following data pertain to operations concerning the product for the last month: }\\\begin{array} { | l | l | l | } \hline \text { Actual materials purchased } & 5,800 & \text { grams } \\\hline \text { Actual cost of materials purchased } & \$ 108,460 & \\\hline \text { Actual materials used in production } & 5,200 & \text { grams } \\\hline \text { Actual output } & 2,700 & \text { units } \\\hline\end{array}\end{array}$$
-Tower Company planned to produce 3,000 units of its single product, Titactium, during November. The standards for one unit of Titactium specify six grams of materials at
$0.30 per gram. Actual production in November was 3,100 units of Titactium. There was a favourable materials price variance of $380 and an unfavourable materials quantity variance of $120. Based on these variances, one could conclude that:

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

---

Definitions:

Net Cash Flow

The variance between the amount of cash coming into a business and going out of it during a given time frame.

Precise Research Question

A well-defined and specific question that guides a research study, intended to facilitate focused and meaningful investigation.

Research Question

A precise, clear question that guides a study towards its objectives and findings.

IQ Scores

Numerical values derived from standardized tests designed to measure human intelligence and cognitive abilities relative to a population.