YumYum Corporation Makes Brownies and Fudge

question 161

Multiple Choice

YumYum Corporation makes brownies and fudge. YumYum Corporation gathered the following information for the current year regarding its use of sugar (sugar is a direct material for brownies and powdered sugar is a direct material for fudge) :

-What is the direct material efficiency variance for Powered Sugar in Fudge?

• A) $2,550 favourable
• B) $1,650 favourable
• C) $2,550 unfavourable
• D) $1,650 unfavourable

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Definitions:

Machinery and Equipment

These are tangible assets used in the operations of a business, often involved in the manufacturing, production, or service delivery processes.

Land Improvements

Enhancements made to a parcel of land to increase its value or usability, such as landscaping, fencing, and installation of utilities, which are usually depreciable over their useful life.

Buildings

Structures erected to serve as premises for business, residential, or other purposes, considered as fixed assets on a balance sheet.

Land

Land refers to the surface of the earth and any permanent fixtures attached to it, considered a fixed asset in accounting and not subject to depreciation.