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

question 411

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 quantity variance for the month is closest to:

• A) $86 Unfavorable
• B) $86 Favorable
• C) $94 Unfavorable
• D) $94 Favorable

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Definitions:

Revenue Variance

The difference between actual revenue and budgeted or forecasted revenue, indicating the performance of a business.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing for more accurate budgeting in variable operational conditions.

Materials Price Variance

The difference between the actual unit price paid for an item and the standard price, multiplied by the quantity purchased.

Standard Cost

A predetermined cost of manufacturing a single unit or a number of product units during a specific period under current or anticipated conditions.