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

question 422

Multiple Choice

Leonesio Corporation makes a product that uses a material with the following standards: The company budgeted for production of 3,100 units in August, but actual production was 3,200 units. The company used 27,600 kilos of direct material to produce this output. The company purchased 29,000 kilos of the direct material at a total cost of $118,900. The direct materials purchases variance is computed when the materials are purchased.The materials price variance for August is:

• A) $2,900 Unfavorable
• B) $2,624 Unfavorable
• C) $2,900 Favorable
• D) $2,624 Favorable

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Definitions:

Budget Deficit

A situation where a government's expenditures exceed its revenues, resulting in the need to borrow money to cover the shortfall.

Government Spending

All expenditures made by government agencies on goods, services, and projects to achieve economic and social goals.

Tax Revenue

The revenue collected by governments from taxes, which finances public services and government commitments.

Treasury Bonds

Treasury bonds are long-term government debt securities issued by the Department of the Treasury with a maturity of more than ten years.