Cox Company's Direct Material Costs for the Month of January

question 173

Multiple Choice

Cox Company's direct material costs for the month of January were as follows: $\begin{array}{lr}\text { Actual quantity purchased } & 18,000 \text { kilograms } \\\text { Actual unit purchase price } & \$ 3.60 \text { per kilogram } \\\text { Materials price variance- } \\\quad \text { Unfavourable (based on purchases) }& \$ \$ 3,600\\\text { Standard quantity allowed } \\\text { for actual production }&16,000 \text { kilograms } \\\text { Actual quantity used } & \text { 15,000 kilograms }\\\end{array}$ What was the favourable direct materials quantity variance for January?

• A) $3,360.
• B) $3,375.
• C) $3,400.
• D) $3,800.

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Definitions:

T-Distribution

A probability distribution that arises when estimating the mean of a normally distributed population in situations where the sample size is small and population standard deviation is unknown.

Confidence Interval

A set of numerical values, obtained from statistical analysis of a sample, which is expected to encompass the actual value of a parameter from a larger, unspecified population.

Standard Error

An estimate of the standard deviation of a sampling distribution, reflecting the accuracy with which a sample represents a population.

Confidence Interval

A span of numbers obtained from sample data, which probably includes the value of an unknown parameter from the overall population.