Grayson Industries Has Collected the Following Data for One of Its

question 162

Multiple Choice

Grayson Industries has collected the following data for one of its products:

-How much is the direct materials price variance at Grayson Industries?

• A) $38,000 favourable
• B) $38,000 unfavourable
• C) $4,000 favourable
• D) $4,000 unfavourable

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Definitions:

Direct Materials

Raw materials that are directly traceable to the manufacturing of a specific product and constitute a significant portion of the production costs.

Equivalent Units

A concept used in cost accounting to express the amount of work done on partially completed goods in terms of fully completed units.

Manufacturing Overhead

Costs, other than direct materials and direct labor costs, that are incurred in the manufacturing process.

Factory Overhead

encompasses all indirect costs associated with manufacturing operations, including utilities, maintenance, and factory manager salaries.