Ravena Labs

question 226

Multiple Choice

Ravena Labs., Incorporated makes a single product which has the following standards:Direct materials: 2.5 ounces at $20 per ounceDirect labor: 1.4 hours at $12.50 per hourVariable manufacturing overhead: 1.4 hours at 3.50 per hourVariable manufacturing overhead is applied on the basis of standard direct labor-hours. The following data are available for October:3,750 units of compound were produced during the month.There was no beginning direct materials inventory.Direct materials purchased: 12,000 ounces for $225,000.The ending direct materials inventory was 2,000 ounces.Direct labor-hours worked: 5,600 hours at a cost of $67,200.Variable manufacturing overhead costs incurred amounted to $18,200.Variable manufacturing overhead applied to products: $18,375.The materials price variance for October is:

• A) $15,000 Unfavorable
• B) $15,000 Favorable
• C) $25,000 Unfavorable
• D) $25,000 Favorable

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Definitions:

Future Interest Rates

Expected rates of interest in future periods, often projected based on current economic conditions and trends.

Significant Declines

Significant Declines describe substantial reductions in value, performance, or status, which might indicate urgent issues requiring attention or analysis.

Callable Bonds

Bonds that can be redeemed by the issuer before their maturity date at a specified price at or after a certain date.

Fair Market Price

The price of a good or service that is agreed upon by both buyer and seller, under no pressure, in an open and competitive market.