The Following Data Relate to Direct Materials Costs for February

question 67

Multiple Choice

The following data relate to direct materials costs for February:
Materials cost per yard: standard, $2.00; actual, $2.10
Yards per unit: standard, 4.5 yards; actual, 4.75 yards
Units of production: 9,500
-The total direct materials cost variance is

• A)$9,262.50 unfavorable
• B)$9,262.50 favorable
• C)$3,780.00 unfavorable
• D)$3,562.50 favorable

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Definitions:

Debit

An entry recorded on the left side of a double-entry accounting system that increases assets or expenses and decreases liabilities, equity, and revenue.

Inventory Purchases

This term refers to the buying of goods and materials that a business intends to sell in the future as part of its operations.

Accounts Payable Aging Report

A financial report that categorizes a company's accounts payable according to the duration that an invoice has been outstanding, helping businesses manage their debts effectively.

Accounts Receivable Aging Report

A detailed document that shows the unpaid invoice balances along with the duration for which they've been outstanding.