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

question 96

Multiple Choice

Fluegge 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 December:
The raw materials price variance for the month is closest to:

• A) $15,060 Unfavorable
• B) $14,016 Favorable
• C) $15,060 Favorable
• D) $14,016 Unfavorable

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Definitions:

FIFO

FIFO, or First-In, First-Out, is an inventory valuation method where goods first added to inventory are the first to be sold.

IFRS

International Financial Reporting Standards, a set of accounting standards that provide a global framework for how public companies prepare and disclose their financial statements.

Net Realizable Value

The estimated selling price in the ordinary course of business minus any costs necessary to make the sale.

LIFO

Last In, First Out, an inventory valuation method where the last items added to inventory are assumed to be the first ones removed, affecting cost of goods sold and inventory value.