Milar Corporation Makes a Product with the Following Standard Costs

question 55

Multiple Choice

Milar Corporation makes a product with the following standard costs: In January the company produced 2,000 units using 16,060 pounds of the direct material and 210 direct labor-hours. During the month, the company purchased 16,900 pounds of the direct material at a cost of $65,910. The actual direct labor cost was $4,473 and the actual variable overhead cost was $756.The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.The materials price variance for January is:

• A) $1,690 Unfavorable
• B) $1,540 Favorable
• C) $1,540 Unfavorable
• D) $1,690 Favorable

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Definitions:

Clothing

Clothing and items donned on the body, usually crafted from textiles or cloths.

Food

Consumable items produced through agriculture, farming, hunting, fishing, or food processing that individuals eat for nutrition and pleasure.

Perfectly Competitive Market

A theoretical market structure characterized by many buyers and sellers, homogeneous products, and no barriers to entry or exit, where all entities are price takers.

Knowledge

Information, understanding, or skills acquired through education or experience.