A Company Uses the Following Standard Costs to Produce a Single

question 184

Multiple Choice

A company uses the following standard costs to produce a single unit of output.
During the latest month,the company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output.Direct labor costs for the month totaled $56,350 based on 4,900 direct labor hours worked.Variable manufacturing overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was $10,400.
-Based on this information,the total direct materials cost variance for the month was:

• A)$4,000 unfavorable
• B)$4,000 favorable
• C)$5,800 favorable
• D)$5,800 unfavorable
• E)$1,800 favorable

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Definitions:

Reliability

The consistency of a measure or instrument, such that it yields the same results under consistent conditions across multiple trials.

Variability

The degree to which data points in a statistical distribution or data set diverge from the average or mean value.

Null Hypothesis

A statement in statistical inference that proposes there is no significant difference or effect, serving as the basis for testing.

Expected Value

The predicted value of a variable, calculated as the sum of all possible values each multiplied by the probability of its occurrence.