Turrubiates Corporation Makes a Product That Uses a Material with the Following

question 6

Multiple Choice

Turrubiates Corporation makes a product that uses a material with the following standards: The company budgeted for production of 2,300 units in April, but actual production was 2,400 units. The company used 16,410 liters of direct material to produce this output. The company purchased 18,600 liters of the direct material at $1.10 per liter.The direct materials purchases variance is computed when the materials are purchased.The materials price variance for April is:

• A) $1,860 Unfavorable
• B) $1,860 Favorable
• C) $1,560 Unfavorable
• D) $1,560 Favorable

---

Definitions:

Economic Profit

The difference between the total revenue generated by a business and its total costs, including both explicit and implicit costs.

Market Price

The price at which a good or service is offered in the marketplace, determined by supply and demand dynamics.

Total Product

The total quantity of goods or services produced by a firm or economy at a given time.

Profit-Maximizing Output

The level of production that maximizes a firm’s profits, determined by the intersection of marginal cost and marginal revenue.