The Following Information Is Available for Maher Manufacturing Company

question 113

Multiple Choice

The following information is available for Maher Manufacturing Company.
-- Direct materials price standard is $3.25 per pound.
-- Direct materials quantity standard is six pounds per finished unit.
-- Budgeted production is 25,000 finished units.
-- 175,000 pounds of direct materials were purchased for $525,000.
-- 175,000 pounds of direct materials were used in production.
-- 25,600 finished units of product were produced.
What is the direct materials quantity variance?

• A) $21,400 Unfavorable
• B) $21,400 Favorable
• C) $69,550 Unfavorable
• D) $69,550 Favorable

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or selection among multiple options.

Money Supply

The total amount of monetary assets available in an economy at a specific time, including cash, bank deposits, and liquid assets.

Money Market

A sector of the financial market where short-term financial instruments with high liquidity are traded.

Money Demand Curve

A visual depiction illustrating the connection between how much money individuals wish to retain and the rate of interest.