Boxes Company Has Collected the Following Data for One of Its

question 21

Multiple Choice

Boxes Company has collected the following data for one of its products:
$\begin{array}{|l|r|}\hline\text { Direct materials standard (3 pounds @ } \$ 1 / 1 \mathrm{~b} .) & \$ 3 \text { per finished good } \\\hline \text { Direct materials flexible budget variance-unfavorable } & \$ 14,000 \\\hline \text { Actual direct materials used } & 100,000 \text { pounds } \\\hline \text { Actual finished goods produced } & 25,000 \text { units } \\\hline\end{array}$
How much is the direct materials efficiency variance?

• A) $11,000 unfavorable
• B) $11,000 favorable
• C) $25,000 unfavorable
• D) $25,000 favorable

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Definitions:

Jensen Portfolio Evaluation Measure

The Jensen Portfolio Evaluation Measure is a performance metric that assesses the return of an investment portfolio while adjusting for risk, comparing it to the expected return of the market with a given risk level.

CAPM

The Capital Asset Pricing Model is a theoretical framework that explains how the expected return on assets, especially stocks, is related to their systematic risk.

Measure of Return

A financial metric used to quantify the performance of an investment by assessing the gain or loss it generates.

Unit of Risk

A Unit of Risk quantifies the exposure to potential loss in an investment, typically measuring the volatility or variability of returns over a specified period.