Coffey Company Maintains a Very Large Direct Materials Inventory Because

question 10

Essay

Coffey Company maintains a very large direct materials inventory because of critical demands placed upon it for rush orders from large hospitals.Item A contains hard-to-get material Y.Currently,the standard cost of material Y is $4.00 per gram.During February,22,000 grams were purchased for $4.10 per gram,while only 20,000 grams were used in production.There was no beginning inventory of material Y.
Required:
a.Determine the direct materials price variance,assuming that all materials costs are the responsibility of the materials purchasing manager.
b.Determine the direct materials price variance,assuming that all materials costs are the responsibility of the production manager.
c.Discuss the issues involved in determining the price variance at the point of purchase versus the point of consumption.

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Definitions:

Negative Symptoms

In psychology, particularly in the context of schizophrenia, symptoms that reflect an absence or lack of functions or behaviors that are normally present, such as emotional expression or motivation.

Withdrawal

The process or symptoms that occur when a person stops using or reduces the intake of a psychoactive substance after prolonged use.

Flat Affect

A lack of emotional expression or emotional response in an individual.

Cultural Scaffolding

The support provided by cultural practices, tools, and institutions that help individuals understand and function within their society.