Jackson Industries Has Collected the Following Data for One of Its

question 36

Multiple Choice

Jackson Industries has collected the following data for one of its products:

How much is the direct materials price variance?

• A)$1,750 favorable
• B)$1,750 unfavorable
• C)$1,900 favorable
• D)$1,900 unfavorable

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Definitions:

Variable Expenses

Expenses that vary directly with changes in production volume or business activity levels.

Fixed Expenses

Costs that do not vary in the short term, regardless of the level of goods or services produced by the business.

Actual Sales

The total revenue a company generates from selling its goods or services, as opposed to projected or forecasted sales.

Contribution Margin Ratio

A measurement that shows the percentage of sales revenue that exceeds variable costs, indicating how much contributes to fixed costs and profits.