Billey Corp

question 140

Multiple Choice

Billey Corp. produced 5,000 units this year. The standard quantity of raw materials per unit was 2 kilograms, and the standard price per kilogram was $3. The company actually used 2.1 kilograms per unit, and paid $3.10 per kilogram. The raw materials usage variance was

• A) $1,550 unfavorable
• B) $1,500 unfavorable
• C) $1,500 favorable
• D) $1,550 favorable

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Definitions:

Nominal Rate

The stated interest rate on a loan or investment, not accounting for compounding or inflation effects.

Present Value

The actual value of future money amounts or incoming cash flows, calculated using an established return rate.

Interest Payable

This refers to the amount of interest expense that has accrued but has not yet been paid by the company.

Periodic Bond Interest Payments

The regular interest payments made to bondholders during the life of the bond.