A Manufacturing Company Has a Standard Quantity of Direct Materials

question 44

Multiple Choice

A manufacturing company has a standard quantity of direct materials of 7 pounds per unit at a standard price of $2.20 per pound.In April the actual material price was $2.40 per pound and the company produced 5,500 units.If the company experienced a favorable material quantity variance of $6,600 during the month, how much was the actual quantity of material used?

• A)35,500 pounds
• B)32,542 pounds
• C)38,500 pounds
• D)41,500 pounds

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Definitions:

Adjusting Entries

Accounting records prepared at the close of a fiscal period to distribute profits and costs to the period they genuinely took place.

Accrued Revenues

Revenues earned by a company for services or goods provided but not yet received or billed to the client.

Cash Basis

An accounting method where revenues and expenses are recorded when they are actually received or paid, not when they are incurred.

Adjustments

Entries made in accounting records to correct or update financial information.