Ajax and Brindel Corporations Have Filed Consolidated Returns for Several

question 83

Multiple Choice

Ajax and Brindel Corporations have filed consolidated returns for several calendar years.Ajax acquires land for $60,000 on January 1 of last year.On September 1 of this year,Ajax sells the land to Brindel for $90,000.The basis and holding period for the land acquired by Brindel are:

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Definitions:

Favorable Cost Variance

A situation where the actual cost of a product or service is less than its budgeted or standard cost.

Direct Materials Price Variance

The difference between the actual cost of direct materials used and the budgeted cost, based on the standard prices.

Direct Materials Quantity Variance

The deviation of the actual direct materials amount utilized in manufacturing from the expected standard amount, times the set cost per unit.

Standard Price

The predetermined cost of a single unit of product or service, used in budgeting and to measure efficiency.