The Standard Costs and Actual Costs for Direct Materials for the Manufacture

question 132

Multiple Choice

The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are as follows: The direct materials quantity variance is

• A)$875 favorable
• B)$850 unfavorable
• C)$850 favorable
• D)$875 unfavorable

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Definitions:

Business Form

The legal structure or organization of a business, such as sole proprietorship, partnership, corporation, or limited liability company (LLC).

S Corporation

A designation for a corporation that meets specific Internal Revenue Service criteria, allowing it to be taxed as a pass-through entity, thereby avoiding the double taxation typically applied to corporations.

Purported Partnership

The appearance of partnership when there is no partnership; it arises when a person misleads a second person into believing that the first person is a partner of a third person; a theory that allows the second person to recover from the first person all reasonable damages the second person has suffered due to his reliance on the appearance of partnership.

Constructive Partnership

A legal concept where a partnership is deemed to exist based on the actions or conduct of the parties, despite there being no formal agreement.