Denmark Corporation's Variance Report for the Purchasing Department Reports 1000

question 228

Multiple Choice

Denmark Corporation's variance report for the purchasing department reports 1000 units of material A purchased and 2400 units of material B purchased. It also reports standard prices of $2 for Material A and $3 for Material B. Actual prices reported are $2.10 for Material A and $2.80 for Material B. Denmark should report a total price variance of

• A) $380 F.
• B) $340 F.
• C) $340 U.
• D) $380 U.

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Definitions:

Undisclosed Principal

A person who remains unknown to a third party while being represented by an agent in a transaction or agreement.

Disclosed Principal

A principal whose identity is known to the third party at the time a contract is entered into by the agent on behalf of the principal.

Partially Disclosed Principal

A principal whose identity is unknown by a third party, but the third party knows that the agent is or may be acting for a principal at the time the agent and the third party form a contract.

Nonperformance

The failure to fulfill a contractual obligation or carry out an agreement as specified.