Denmark Corporation's Variance Report for the Purchasing Department Reports 1000

question 228

Multiple Choice

Denmark Corporation's variance report for the purchasing department reports 1000 units of material A purchased and 2400 units of material B purchased. It also reports standard prices of $2 for Material A and $3 for Material B. Actual prices reported are $2.10 for Material A and $2.80 for Material B. Denmark should report a total price variance of

• A) $380 F.
• B) $340 F.
• C) $340 U.
• D) $380 U.

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Definitions:

Consumer

An individual or group that purchases goods or services for personal use.

Perceived Budget Line

A graphical representation of all possible combinations of goods that a consumer can purchase with a given budget, based on their perception of available resources.

Equilibrium

A state in which economic forces such as supply and demand are balanced and in the absence of external influences, the values of economic variables will not change.

Investor

A person or organization that invests money anticipating a return on their investment.