Figure 17-1
Max Company Has Developed the Following Standards for One

question 72

Multiple Choice

Figure 17-1
Max Company has developed the following standards for one of its products: $\begin{array}{ll}\text { Direct materials } & 15 \text { pounds } \times £ 16 \text { per pound } \\\text { Direct labour } & 4 \text { hours } \times £ 24 \text { per hour } \\\text { Variable overhead } & 4 \text { hours } \times £ 14 \text { per hour }\end{array}$ The following activities occurred during the month of October: $\begin{array}{lc}\text { Materials purchased } & 10,000 \text { pounds costing } £ 170,000 \\\text { Materials used } & 7,200 \text { pounds } \\\text { Units produced } & 500 \text { units } \\\text { Direct labour } & 2,300 \text { hours at } £ 23.60 \text { per hour } \\\text { Actual variable overhead } & £ 30,000\end{array}$ The company records materials price variances at the time of purchase.
-Refer to Figure 17-1. Max's variable standard cost per unit would be

• A)£392.
• B)£336.
• C)£296.
• D)£152.

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Definitions:

Permanent Endowment

A donation of money or property to a nonprofit organization, which uses the resulting investment income for a specific purpose.

Fundraising Activities

Efforts undertaken by an organization to generate voluntary financial contributions from individuals, businesses, charitable foundations, or governmental agencies.

Conditional Contribution

A donation made with specified terms that must be met for the contribution to be retained by the recipient.

FASB

The Financial Accounting Standards Board (FASB) is an independent organization responsible for establishing accounting and financial reporting standards for companies and non-profit organizations in the United States.