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

---

Definitions:

Managerial Task

Managerial task refers to the specific duties, responsibilities, and activities that managers are required to perform as part of the management process, including planning, organizing, leading, and controlling.

Contingency

A future event or circumstance that is possible but cannot be predicted with certainty.

Operative Goal

A specific, detailed target that an organization aims to achieve, often related to its day-to-day operations.

Social Invention

Innovations that relate to how people organize and interact within societies, including new social practices, structures, and technologies.