The Standard Materials Cost to Produce 1 Unit of Product

question 199

Multiple Choice

The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound.In manufacturing 8,000 units,47,000 pounds of material were used at a cost of $51 per pound.What is the direct materials price variance?

• A)$47,000 unfavorable.
• B)$47,000 favorable.
• C)$50,000 unfavorable.
• D)$50,000 favorable.
• E)$3,000 favorable.

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Definitions:

Installment Note

A debt instrument that requires a series of periodic payments of both principal and interest until the debt is paid in full.

Journal Entry

A record in the books of accounts that documents a financial transaction, showing the debit and credit effects.

Interest Expense

Costs incurred by an entity for borrowed funds, which are typically reported on the income statement within the financing or operating sections.

Notes Payable

A written promise to pay a specified amount of money, typically with interest, by a certain date, recorded as a liability on the balance sheet.