Majer Corporation Makes a Product with the Following Standard Costs

question 56

Multiple Choice

Majer Corporation makes a product with the following standard costs:
The company reported the following results concerning this product in February.
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
-The materials quantity variance for February is:

• A) $3,277 F
• B) $3,390 U
• C) $3,390 F
• D) $3,277 U

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Definitions:

Successful-efforts Method

An accounting method used in the energy industry for recognizing and capitalizing only those expenses associated with successfully locating new oil or natural gas reserves.

Full-cost Method

A method of accounting for all expenditures associated with the exploration and development of oil and gas reserves as capitalized costs, which are then amortized over the total volume of proven resources.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board that is globally accepted for financial reporting.

Operating Asset

An Operating Asset is an asset used by a company in its day-to-day operations to generate revenue, such as machinery, buildings, or equipment.