Sanchez Company Established a Direct Materials Standard of 4 Pounds

question 87

Essay

Sanchez Company established a direct materials standard of 4 pounds at $4.50 per pound for one of its products.During March,Sanchez purchased 15,000 pounds at $4.42 per pound.
Required:
Based on this information,
(a)Which variance can you calculate?
(b)What is the dollar amount of the variance?
(c)Is the variance favorable or unfavorable?
(d)Do you consider the variance to be sufficiently material that managers should investigate to discover the cause of the variance?

---

Definitions:

Illegal Drugs

Substances whose production, sale, or possession are prohibited by law due to their potential for abuse and adverse health effects.

Shoplifting

The act of stealing merchandise from a retail establishment.

Undercover Police Officer

A law enforcement official who operates incognito to investigate criminal activity without revealing their true identity.

Defense

Legal strategies and actions taken to protect oneself or one's interests against legal claims or charges.