The Standard Costs and Actual Costs for Direct Materials for the Manufacture

question 172

Multiple Choice

The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are as follows: Standard Costs
Direct materials (per completed unit) $\quad 1.04$ kilograms $@ \$ 8.75$

Actual Costs
Direct materials $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 2,500 kilograms $@ \$ 8$
? The amount of direct materials price variance is:

• A) $1,875 unfavorable.
• B) $1,950 favorable.
• C) $1,875 favorable.
• D) $1,950 unfavorable.

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Definitions:

Timeliness

The quality of being done at the appropriate or advantageous time, particularly in the context of information being available when it is needed.

Verifiability

An accounting principle that ensures all information reported is backed by evidence and can be confirmed by independent observers.

GAAP

Generally Accepted Accounting Principles; the standard framework of guidelines for financial accounting used in any given jurisdiction.

Reliability

In accounting, it refers to the accuracy and consistency of financial reporting, ensuring that information faithfully represents the entity's financial condition.