Precilla Company Uses a Standard Costing System That Allows 2

question 168

Multiple Choice

Precilla Company uses a standard costing system that allows 2.0 pounds of direct materials for one finished unit of product. During July, the company purchased 40,000 pounds of direct materials for $210,000, and manufactured 12,000 finished units. The standard direct materials cost allowed for the units manufactured is $120,000. The performance report shows that Precilla has an unfavorable direct materials usage variance of $5,000. Also, the company records any price variance for materials at time of purchase.

The actual number of pounds (AQ) of direct materials used to produce July's output, to the nearest whole number, was:

• A) 12,000 pounds.
• B) 20,000 pounds.
• C) 24,000 pounds.
• D) 25,000 pounds.
• E) 40,000 pounds.

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Definitions:

High Risk Areas

Locations identified as having a significant probability of experiencing hazardous events, such as natural disasters or environmental threats.

Seismic Waves

Vibrations that travel through Earth's layers, caused by natural processes like earthquakes or artificial events such as explosions.

Refraction

The deflection of a ray, as in light or a seismic wave, due to its passage from one material to another of different density.

Liquid Core

The fluid, outer layer of Earth's core, composed primarily of molten iron and nickel.