Mystic Falls Inc. Mystic Falls Inc. Bottles and Sells a Popular Soft Drink

question 57

Multiple Choice

Mystic Falls Inc.
Mystic Falls Inc. bottles and sells a popular soft drink. In 2009, the company had expected to sell 1 000 000 bottles but actually bottled and sold 900 000 bottles. The standard direct materials cost for each bottle is $.40 comprised of 10 grams at a cost of $.04 per gram. During 2009, 10 000 000 grams of material were purchased out of which 9 200 000 grams were used at a cost of $.05 per gram.
-The direct materials usage variance for 2009 was:

• A) $ 8000 U
• B) $ 8000 F
• C) $40 000 U
• D) $40 000 F

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Definitions:

Indorse

Refers to the act of signing the back of a negotiable instrument, such as a check, in order to transfer ownership or to approve the terms.

UCC

The Uniform Commercial Code, a set of laws that govern commercial transactions in the United States.

Negotiation

Negotiation is a process of discussion aimed at reaching an agreement where two or more parties with different needs and goals discuss an issue to find a mutually acceptable solution.

Holder

A person in possession of a document of title or an instrument payable or indorsed to him, his order, or to bearer.