Marks Company Makes One Product,for Which It Has Established the Following

question 33

Essay

Marks Company makes one product,for which it has established the following standards for materials:
Average quantity of material per unit of product: 4.5 pounds
Price per pound of materials: $16
During March,Marks made 10,000 units of the product,using 50,000 pounds at a total purchase price of $825,000.
Required:
(a)Determine the total flexible budget materials variance and indicate whether it is favorable or unfavorable.
(b)Calculate the materials price variance and indicate whether it is favorable or unfavorable.
(c)Determine the materials usage variance and indicate whether it is favorable or unfavorable.

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Definitions:

Overpopulation

A condition where an area's population exceeds the capacity of the environment to sustain it with basic necessities such as clean water, shelter, and food.

Capitalism

An economic system based on private ownership of the means of production and the creation of goods or services for profit.

Karl Marx

A 19th-century philosopher, economist, and political theorist known for his critical analysis of capitalism and his theories about communism.

Demographic Transition

The process of change in a society's population from high birth and death rates to low birth and death rates, often associated with economic development.