In the Celtex Case Study,Leo Garcia,President of the Synthetic Chemical

question 16

Multiple Choice

In the Celtex case study,Leo Garcia,President of the synthetic chemical division,regularly fails to sell his products to and through the consumer products division.This is because:

• A)there is a market-based alternative to his products that are cheaper.
• B)Celtex has a faulty organizational structure that regularly cheats Garcia.
• C)the head of the consumer products division does not understand the difference between price and value.
• D)Garcia produces inferior products.

---

Definitions:

Direct Materials Quantity Variance

A measure used in cost accounting to indicate the variance between the actual quantity of materials used and the standard quantity expected to be used in production.

Standard Material Requirement

The predetermined amount of materials specified for the production of a single unit of product, often used in budgeting and controlling costs.

Standard Cost

A predetermined or budgeted cost of manufacturing a product or performing a service, used as a benchmark to measure performance.

Direct Materials Quantity Variance

The difference between the actual quantity of direct materials used in production and the standard quantity expected, multiplied by the standard cost per unit.