Tharaldson Corporation Makes a Product with the Following Standard Costs

question 142

Multiple Choice

Tharaldson Corporation makes a product with the following standard costs: The company reported the following results concerning this product in June.
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 June is:

• A) $2,140 Unfavorable
• B) $2,140 Favorable
• C) $1,820 Unfavorable
• D) $1,820 Favorable

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Definitions:

EBITDA Coverage Ratio

A financial ratio that measures a company's ability to pay off its operating expenses and debts with its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).

Debt Ratio

A financial ratio that compares a company’s total debt to its total assets, indicating the proportion of a company's assets that are financed by debt.

TIE Ratio

The times interest earned ratio, a financial metric measuring a company's ability to meet its debt obligations based on its current income.

Window Dress

Practices by mutual funds and other portfolio managers near the reporting period end to improve the appearance of the financial statements.