Fletcher Company Collected the Following Data Regarding Production of One

question 161

Multiple Choice

Fletcher Company collected the following data regarding production of one of its products. Compute the total direct materials cost variance. $\begin{array}{llr} \text { Direct materrals standard (6 lbs. @ \$2/1b.) } &\$12& \text { per finished unit } \\ \text { Actual direct materials used} &243,000& \text {Ibs. } \\ \text {Actual finished units produced } &40,000& \text {units } \\ \text { Actual cost of direct materials used } &\$483,570\\\end{array}$

• A) $2,430 favorable.
• B) $6,000 unfavorable.
• C) $6,000 favorable.
• D) $3,570 favorable.
• E) $3,570 unfavorable.

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Definitions:

Acquisition

The process of acquiring control of another company or business asset through purchase, merger, or another method.

Independent Appraiser

A certified professional who provides an unbiased opinion on the value of an asset, often used in real estate transactions, without any direct connection to the buyer or seller.

Journal Entry

A record in accounting that represents each transaction with debits and credits in financial accounts.

Plant Assets

Long-term tangible assets that are used in the production of goods or services and are not intended for resale, including buildings, machinery, and equipment.