The Frosty Company Makes Mugs for Which the Following Standards

question 59

Multiple Choice

The Frosty Company makes mugs for which the following standards have been developed: $$\begin{array} { l l l } & \text { Standard Inputs } & \text { Standard Price } \\& \text { Expected for E ach } & \text { Expected per } \\& \text { Unit of Output } & \text { Unit of Output } \\\text { Direct materials } & 5 \text { ounc es } & \$ 2 \text { per ounce } \\\text { Direct labor } & 1.5 \text { hours } & \$ 8 \text { per hour }\end{array}$$ Production of 400 mugs was expected in July, but 440 mugs were actually completed. Direct materials purchased and used were 2,100 ounces at an actual price of $2.20 per ounce. Direct labor cost for the month was $5,310, and the actual pay per hour was $9.00. _ is the direct- material price variance for July.

• A) $420 favorable
• B) $420 unfavorable
• C) $400 unfavorable
• D) $400 favorable

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Definitions:

Skeletal Muscles

The muscles attached to the bones of the skeleton, responsible for movement and stability of the body.

Liver

A large, vital organ in the body performing essential functions such as detoxification, protein synthesis, and the production of biochemicals necessary for digestion.

Brain

The organ located in the head of humans and other vertebrates, responsible for central nervous system activities, including thought, memory, and control of movement.

Bone Marrow

The soft, spongy tissue found inside bones, responsible for the production of blood cells.