Gutierrez Company Budgeted 10,000 Kilograms of Direct Materials Costing $21

question 121

Multiple Choice

Gutierrez Company budgeted 10,000 kilograms of direct materials costing $21.50 per kilogram to make 5,000 units of product. The company actually purchased and used 10,200 kilograms of direct materials costing $24.00 per kilogram to make the 5,000 units.
-What is the direct materials price variance at the Gutierrez Company?

• A) $25,000 favourable
• B) $25,500 unfavourable
• C) $25,000 unfavourable
• D) $25,500 favourable

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Definitions:

Chapter 11

A provision of the United States Bankruptcy Code that allows businesses to reorganize and restructure their debts under the supervision of the court.

Automatic Stay

A legal provision that halts actions by creditors, with certain exceptions, to collect debts from a debtor who has declared bankruptcy.

Collection Proceedings

The legal process initiated by creditors to recover debts from borrowers through formal legal actions, including lawsuits, garnishments, and property liens.

Order for Relief

A court order in bankruptcy proceedings that gives the petitioner protection from creditors and approves the commencement of bankruptcy processes.