Sanchez Company Established a Direct Materials Standard of 4 Pounds

question 87

Essay

Sanchez Company established a direct materials standard of 4 pounds at $4.50 per pound for one of its products.During March,Sanchez purchased 15,000 pounds at $4.42 per pound.
Required:
Based on this information,
(a)Which variance can you calculate?
(b)What is the dollar amount of the variance?
(c)Is the variance favorable or unfavorable?
(d)Do you consider the variance to be sufficiently material that managers should investigate to discover the cause of the variance?

---

Definitions:

Expert Systems

Computer systems that emulate the decision-making ability of a human expert in specific domains.

Pluralistic Politics

A political system that recognizes and accommodates diversity, allowing multiple groups or parties to coexist and influence decision-making.

Rationality

The quality of being based on or in accordance with reason or logic; often involves choosing the most efficient means to achieve a specific end.

Classical Industrial Society

Refers to a stage in societal development characterized by the growth of factories, mechanization, and mass production, typically associated with the 18th and 19th centuries.