Parallel Enterprises Has Collected the Following Data on One of Its

question 104

Multiple Choice

Parallel Enterprises has collected the following data on one of its products. During the period the company produced 25,000 units. The direct materials quantity variance is: $$\begin{array} { l l } \text { Direct materials standard ( } 7 \mathrm {~kg} @ \$ 2 / \mathrm { kg } ) & \$ 14 \text { per finished unit } \\\text { Actual cost of materials purchased } & \$ 322,500 \\\text { Actual direct materials purchared and used } & 150,000 \mathrm {~kg}\end{array}$$

• A) $27,500 unfavorable.
• B) $50,000 unfavorable.
• C) $50,000 favorable.
• D) $22,500 unfavorable.
• E) $22,500 favorable.

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Definitions:

Scarcity

Is the fundamental economic problem of having seemingly unlimited human wants and needs in a world of limited resources.

Societies

Large groups of individuals who live together in an organized community with shared laws, traditions, and values.

Goods and Services

The output of an economy or a firm that consists of tangible commodities (goods) and intangible activities (services) offered to satisfy consumer needs.

Subjective Concept

An idea or notion based on personal opinions, interpretations, points of view, emotions, and judgment.