Precilla Company Uses a Standard Costing System That Allows 2

question 109

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 direct materials purchase-price variance in July (to the nearest dollar) was:

• A) $10,000 unfavorable.
• B) $50,000 unfavorable.
• C) $80,000 unfavorable.
• D) $86,000 unfavorable.
• E) $90,000 unfavorable.

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Definitions:

Closed Geometric Figures

Shapes whose edges are completely connected, enclosing a space.

Reinforcers

Any stimuli, objects, or events that increase the likelihood of a behavior being repeated when they are applied.

Unpleasant Stimuli

External or internal factors that are perceivable and can cause discomfort or negativity.

Aversive Stimuli

An unpleasant or harmful object, event, or situation that causes a decrease in the behavior it follows.