The Following Materials Standards Have Been Established for a Particular

question 306

Multiple Choice

The following materials standards have been established for a particular product: The following data pertain to operations concerning the product for the last month:
What is the materials price variance for the month?

• A) $3,141 Unfavorable
• B) $2,025 Unfavorable
• C) $8,600 Unfavorable
• D) $8,725 Unfavorable

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Definitions:

Generating Revenues

Generating revenues refers to the process through which a business earns money by selling goods or providing services.

Expenses

Outflows or other using up of assets or incurrences of liabilities during a period from delivering or producing goods, rendering services, or carrying out other activities that constitute the entity’s ongoing major operations.

Increase Side

In accounting, it refers to the side of a ledger account (debit or credit) where increases are recorded, depending on the nature of the account.

Decrease Side

The side of an account that is used to record decreases in value, typically the left side for assets and expense accounts, and the right side for liability, equity, and revenue accounts.