Allan Company Manufactures Overalls -Refer to the Figure

question 163

Multiple Choice

Allan Company manufactures overalls. During the year, it manufactured 125,000 overalls, using 2.9 hours of direct labour at a rate of $6.25 per hour. The materials and labour standards for manufacturing the overalls are as follows:
Allan required 600,000 m at $1.95 per metre to make the 125,000 overalls.
$\begin{array}{lll}\text {Direct materials ( \( 5 \mathrm{~m} \) of denim \( (012 \) per metre) }&\$10\\\text { Direct labour (3 hours \( @ \$ 6 \) per hour) }&18\\\end{array}$

-Refer to the Figure.What is Allan's materials price variance?

• A)$30,000 U
• B)$30,000 F
• C)$31,250 U
• D)$31,250 F

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Definitions:

Validity

The extent to which a test or instrument measures what it is supposed to measure.

Predictive

Relating to the ability to foresee or anticipate future events or outcomes based on current data or trends.

Standardization

The process of developing and implementing technical standards to ensure consistency and compatibility between processes and products.

Predictive Validity

The extent to which a score on a scale or test predicts future performance on a related measure.