Precilla Company Uses a Standard Costing System That Allows 2

question 13

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.

Precilla's standard price per pound of direct materials (SP) , to two decimal places, is:

• A) $4.00.
• B) $5.00.
• C) $6.00.
• D) $10.00.
• E) $12.00.

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Definitions:

British North America

Historical term for the territories of the British Empire in mainland North America, now mainly constituting Canada.

Spanish North America

The territories in the Americas that were once part of the Spanish Empire, including what are now Mexico, the Southwestern United States, and other regions.

French North America

The territories in North America that were once colonized by France, including parts of Canada, Louisiana, and the Caribbean, significantly influencing the culture and demographics of these regions.

Seven Years' War

This was a conflict of global proportions that lasted from 1756 to 1763, with the involvement of the era's dominant forces, affecting multiple continents and areas including Europe, North America, Central America, the West African coast, India, and the Philippines.