Max Company Has Developed the Following Standards for One of Its

question 153

Multiple Choice

Max Company has developed the following standards for one of its products. The following activity occurred during the month of October:
The company records materials price variances at the time of purchase. The direct materials price variance is

• A) $50,000 F.
• B) $50,000 U.
• C) $10,000 U.
• D) $10,000 F.

---

Definitions:

Net Present Value

A financial metric that calculates the difference between the present value of cash inflows and outflows over a period of time, used for assessing the profitability of investments.

Annual Net

The collective net amount or result, typically pertaining to earnings, income, or profit, achieved or calculated over one year.

Investment

The allocation of resources, usually money, in assets or ventures expecting future financial returns, appreciation, or income.

Straight-Line Method

A depreciation technique that allocates an equal amount of an asset's cost to each year of its useful life.