Dirickson Incorporated Has Provided the Following Data Concerning One of the Products

question 444

Multiple Choice

Dirickson Incorporated has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. The company has reported the following actual results for the product for July:
The raw materials price variance for the month is closest to:

• A) $46,200 Unfavorable
• B) $50,400 Favorable
• C) $46,200 Favorable
• D) $50,400 Unfavorable

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Definitions:

Payback Period

The duration needed to recoup the expenses of an investment.

Simple Rate of Return

A financial metric used to evaluate the efficiency of an investment or to compare the efficiencies of several investments, calculating net annual profit divided by initial investment cost.

Depreciates Assets

The process of allocating the cost of a tangible asset over its useful life, reflecting wear and tear, deterioration, or obsolescence.

Discount Rate

The interest rate used to discount future cash flows to present value, often used in investment and project valuation.