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:

CISG

The United Nations Convention on Contracts for the International Sale of Goods, a treaty providing a uniform set of rules for the international sale of goods.

Sales Contract

A legal agreement between a buyer and a seller detailing the terms and conditions of a sale of goods or services.

Negotiable Instruments

Financial documents that guarantee the payment of a specific amount of money, either on-demand or at a set time, to the holder of the instrument.

Nonconforming Goods

Goods delivered under a contract that fail to meet the specifications or quality standards agreed upon.