The Following Materials Standards Have Been Established for a Particular $\begin{array}{lccc}\text {Standard quantity per unit of output}&\text {8.3 metres}\\\text {Standard price}&\text {\$ 19.15 per metre}\\\end{array}$

question 162

Multiple Choice

The following materials standards have been established for a particular product: $\begin{array}{lccc}\text {Standard quantity per unit of output}&\text {8.3 metres}\\\text {Standard price}&\text {\$ 19.15 per metre}\\\end{array}$
The following data pertain to operations concerning the product for the last month: $\begin{array} { l r } \text { Actual materials purchased } & 7,500 \text { grams } \\\text { Actual cost of materials purchased } & \$ 141,375 \\\text { Actual materials used in production } & 7,100 \text { grams } \\\text { Actual output } & 700 \text { units }\end{array}$ What was the materials price variance for the month?

• A) $2,250 favourable.
• B) $7,540 unfavourable.
• C) $7,660 unfavourable.
• D) $24,317 unfavourable.

---

Definitions:

Horizontal Demand

A market situation where the demand curve is perfectly elastic, indicating that consumers are willing to purchase any quantity at a particular price.

Marginal Revenue

The additional income from selling one more unit of a good; sometimes equal to the price of the good.

Marginal Cost

The increase or decrease in the total cost that arises from producing one additional unit of a product or service.

Profit

Earnings resulting from conducting business, after subtracting all operational costs, taxes, and expenses from total revenue.