Roberts Company Uses a Standard Costing System

question 158

Multiple Choice

Roberts Company uses a standard costing system. The following information pertains to direct materials for the July: Roberts Company reports its material price variances at the time of purchase. What is the material usage variance for Roberts Company?

• A) $900 F
• B) $1,950 F
• C) $2,850 F
• D) $900 U

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Definitions:

Contribution Margin Ratio

The percentage of each sales dollar that remains after variable costs are subtracted, indicating how much contributes towards fixed costs and profit.

Break-Even Point

The level of sales or production at which a business's revenues exactly cover its expenses, leading to neither profit nor loss.

Variable Expenses

Costs that fluctuate in direct proportion to changes in activity level or volume, such as raw materials and direct labor costs.

Contribution Margin Ratio

The contribution margin ratio is a financial metric indicating the proportion of sales revenue that exceeds variable costs, expressed as a percentage.