Standard and Actual Costs for Direct Materials for the Manufacture

question 109

Essay

Standard and actual costs for direct materials for the manufacture of 1,000 units of product were as follows:
Actual costs
1,550 lbs. at $9.10
Standard costs
1,600 lbs. at $9.00
Determine the direct materials (a) quantity variance, (b) price variance, and (c) total cost variance.

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Definitions:

False Positives

Instances in which a test incorrectly indicates the presence of a condition or attribute.

Critical Thinking

The process of purposeful, reflective judgment. Critical thinking manifests itself in giving reasoned and fair-minded consideration to evidence, conceptualizations, methods, contexts, and standards in order to decide what to believe or what to do.

Hypothesis

A proposed explanation made on the basis of limited evidence as a starting point for further investigation.

Evidence

Information or facts that are used to support the validity of a statement or argument.