The Direct Materials Standards for the Main Product of Duchess

question 115

Multiple Choice

The direct materials standards for the main product of Duchess Company are 8 grams of direct materials per product at a cost of $3 per gram.During April,974 grams of direct materials were used to produce 120 products at a direct materials cost of $2,900.The direct materials quantity variance for April was

• A) $72 (U).
• B) $92 (U).
• C) $42 (U).
• D) $112 (F).

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Definitions:

Operating Cash Flow

A financial metric that indicates the amount of money generated by a company's business operations after accounting for operating expenses.

Net Working Capital

A measure of a company's short-term financial health and liquidity, calculated as current assets minus current liabilities.

Profit Margin

A financial metric expressing the ratio of a company's net income to its sales, demonstrating the percentage of revenue that exceeds the cost of goods sold.

Equivalent Annual Cost

A financial analysis approach to compare the cost-effectiveness of different assets with differing lifespans by calculating their annual costs.