The Following Materials Standards Have Been Established for a Particular $\begin{array}{lccc}\text {Standard quantity per unit of output}&\text {1.7 metres}\\\text {Standard price}&\text {\$ 19.80 per metre}\\\end{array}$

question 178

Multiple Choice

The following materials standards have been established for a particular product: $\begin{array}{lccc}\text {Standard quantity per unit of output}&\text {1.7 metres}\\\text {Standard price}&\text {\$ 19.80 per metre}\\\end{array}$
The following data pertain to operations concerning the product for the last month: $\begin{array} { l r } \text { Actual materials purchased } & 5,800 \text { metres } \\\text { Actual cost of materials purchased } & \$ 113,680 \\\text { Actual materials used in production } & 5,100 \text { metres } \\\text { Actual output } & 3,200 \text { units }\end{array}$ What was the materials quantity variance for the month?

• A) $6,664 favourable.
• B) $6,732 favourable.
• C) $13,720 unfavourable.
• D) $13,860 unfavourable.

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Definitions:

Marginal Value Curve

A graphical representation that shows how the marginal value of a good or service changes as its quantity changes.

Quantity Purchased

The total amount of goods or services bought by consumers during a specific period.

Deadweight Loss

A decrease in economic efficiency that happens when a good or service does not reach or cannot reach its equilibrium.

Profit Maximizing

The method or approach of aligning production and pricing to maximize profit.