Thomas Company Uses a Standard Cost System and Recognizes the Materials

question 37

Multiple Choice

Thomas Company uses a standard cost system and recognizes the materials purchase price variance at the time materials are purchased. Information for raw materials for Product RBI for the month of October follows: What is the materials quantity variance?

• A)$175 unfavorable
• B)$165 unfavorable
• C)$175 favorable
• D)$165 favorable

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Definitions:

Information System

A network, usually within an organization, by which information is generated and circulated. This network involves computer systems as well as other mechanisms, such as payroll records, purchasing documents, and managers’ impressions and specific knowledge.

Customer Satisfaction Surveys

Tools or questionnaires used by businesses to evaluate the level of satisfaction of their customers with the company's products or services.

Internal Accounting System

The accounting system that collects, aggregates, and generates and distributes budgeted and actual financial and cost information within the firm for use by executives and managers for both decision making and control.

Management Accounting

The accounting system used within the organization to help the organization achieve its goals.