Scotch Brand Products Produces Packaging Tape and Has Determined the Following

question 103

Multiple Choice

Scotch Brand Products produces packaging tape and has determined the following to be its standard cost of producing one case of budget packaging tape:

$\begin{array}{lr}\text { Material (3.50 ounces at } \$ 1.30 \text { per ounce) } & \$ 4.55 \\\text { Labor (0.30 hour at } \$ 12.00 \text { per hour) } & 3.60 \\\text { Overhead } & 2.20 \\\text { Total } & \$ 10.35 \\\end{array}$

At the start of 2017, Scotch Brand planned to produce 80,000 cases of tape during the year.Overhead is allocated based on the number of cases of tape produced.Annual fixed overhead is budgeted at $56,000 and the standard for variable overhead is $1.50 per case.The following information summarizes the results for 2017:
-Actual production, 75,000 cases
-Purchased 275,000 ounces of material at a total cost of $343,750
-Used 266,250 ounces of material in production
-Employees worked 22,000 hours, total labor cost $275,000
-Actual overhead incurred, $175,000
What is the material price variance for 2017?

• A)$4,875 unfavorable
• B)$13,750 favorable
• C)$13,313 favorable
• D)$8,875 favorable

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Definitions:

Skill

An ability or expertise developed through practice and training, aimed at performing specific tasks effectively.

Participation

Involvement or taking part in a particular process, activity, or decision, typically within an organizational or group setting.

Ohio State Model

A leadership theory that derives from studies conducted at Ohio State University, identifying two dimensions of leadership behavior: consideration and initiating structure.

Initiating Structure

The degree to which a leader clearly defines and structures their role and the roles of their subordinates towards achieving set objectives.