Ransom, Inc

question 126

Essay

Ransom, Inc. budgets direct materials cost at $1.10/liter and each product requires 4 liters per unit of finished product. April's activities show usage of 832 liters to complete 196 units at a cost of
$798.72. Compute the direct materials price and quantity variances. Indicate if the variance is favorable or unfavorable.

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Definitions:

Voluntary Association

An organization formed by individuals who voluntarily come together to pursue common interests or goals without seeking profit.

Co-Own Business

A business jointly owned by two or more individuals or entities, sharing the responsibilities, profits, and losses.

Book Value

The net value of a company's assets minus its liabilities, often used to assess its financial worth.

Market Value

The present-day selling or buying price of an asset or service in a market.