Information Concerning Johnston Co

question 32

Multiple Choice

Information concerning Johnston Co.'s direct materials costs is as follows:The direct materials usage variance for the period, rounded to two decimal places, is:

• A) $307.50 unfavorable.
• B) $307.50 favorable.
• C) $322.50 unfavorable.
• D) $322.50 favorable.
• E) $532.50 favorable.

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Definitions:

Perpetual Inventory System

A method that continuously updates inventory records to reflect sales, returns, and additions in real time.

Perpetual Inventory System

An inventory management system where stock levels are updated in real-time following each purchase or sale.

Inventory Account

An account used to record the value of inventory held by a business, including goods ready for sale and those in the process of being produced.

Subsidiary Inventory Ledger

The subsidiary ledger containing individual accounts for items of inventory.