The Following Information Relates to Truman Unlimited for the Past

question 68

Multiple Choice

The following information relates to Truman Unlimited for the past two years. The current ratio for the current year is closest to

• A)2.00.
• B)13.50.
• C)1.25.
• D)1.97.

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Definitions:

Variances

The differences between expected and actual figures in budgeting and accounting, which can indicate over or under performance.

Materials Price Variance

The difference between the actual cost of materials used in production and the expected cost under standard costing.

Raw Materials

Basic materials that are used in the production process of manufacturing goods, which are then converted into finished products.

Standard Cost

A predetermined cost of manufacturing, labor, and material as estimated in accordance with standards set by the company.