-What Was the Materials Price Variance for the Month?
A)

question 211

Multiple Choice

$\begin{array}{l}\text { The following materials standards have been established for a particular product: }\\\begin{array} { | l | r | } \hline \text { Standard quantity per unit of output } & 6.8 \text { metres } \\\hline \text { Standard price } & \$ 17.10 \text { per metre } \\\hline\end{array}\end{array}$
$\begin{array}{l}\text { The following data pertain to operations concerning the product for the last month: }\\\begin{array} { | l | r | } \hline \text { Actual materials purchased } & 9,000 \text { metres } \\\hline \text { Actual cost of materials purchased } & \$ 156,600 \\\hline \text { Actual materials used in production } & 8,500 \text { metres } \\\hline \text { Actual output } & 1,200 \text { units } \\\hline\end{array}\end{array}$
-What was the materials price variance for the month?

• A) $2,550 favourable.
• B) $2,550 unfavourable.
• C) $2,700 favourable.
• D) $2,700 unfavourable.

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Definitions:

Fair Value Option

An accounting choice giving companies the opportunity to measure financial assets and liabilities at their fair values with changes reflected in the income statement.

Net Income

Net income represents the total earnings of a company once all costs, expenses, and taxes are deducted from its total revenue.

Dividends

Dividends are a portion of a company's earnings distributed to shareholders, usually in the form of cash payments or additional stock.

Equity Method

An accounting technique used to record investments in other companies, where the investment is initially recorded at cost and subsequently adjusted to reflect the investor's share of the net assets of the investee.