Meow Products Ltd In the Current Year, 38 000 Feet of Material Were

question 24

Multiple Choice

Meow Products Ltd.
Meow Products Ltd. in the US produces and sells scratching posts for cats. In the current year, the company had expected to sell 12 000 posts but actually produced and sold 10 000 posts. The following information is available regarding the standard cost to produce a single post:
$\begin{array}{ll}\text { Direct materials: } & 3 \text { feet } @ 1.75 \text { per foot } \\\text { Direct labour: } & 15 \text { minutes } @ \$ .30 \text { per minute }\end{array}$
In the current year, 38 000 feet of material were purchased out of which 35 000 feet were used at a cost of $1.55 per foot, and 160 000 direct labour minutes were incurred at a cost of $.32 per minute.


-The company's direct materials price variance for the current year was:

• A) $2350 F
• B) $7600 F
• C) $7000 U
• D) $4100 U

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Definitions:

Weighted-Average Method

An accounting technique to assign costs to inventory and cost of goods sold, based on the weighted average of the costs of similar goods.

Equivalent Units

A concept in cost accounting used to apportion costs to partially completed units of product, allowing for the calculation of per-unit costs in process costing environments.

Molding Department

A specialized section within a manufacturing plant where raw materials are shaped into components through various molding processes.

Process Cost Summary

A report detailing the total costs associated with the production process, including materials, labor, and overhead expenses, over a specific period.