Min Company Has Developed the Following Standards for One of Its

question 72

Multiple Choice

Min Company has developed the following standards for one of its products. The following activity occurred during the month of November:
$\begin{array}{ll}\text { Direct materials: } & 15 \mathrm{~kg} \times \$ 17.50 \text { per kilogram } \\\text { Direct labour: } & 4 \text { hours } \times \$ 24 \text { per hour } \\\text { Variable manufacturing overhead: } & 4 \text { hours } \times \$ 14 \text { per hour }\end{array}$ The company records materials price variances at the time of purchase.What is the direct materials price variance?
$\begin{array}{ll}\text { Materials purchased: } & 20,000 \mathrm{~kg} \text { costing } \$ 340,000 \\\text { Materials used: } & 7,200 \mathrm{~kg} \\\text { Units produced: } & 500 \text { units } \\\text { Direct labour: } & 2,300 \text { hours at } \$ 23.60 \text { per hour }\end{array}$

• A)$10,000 favourable
• B)$10,000 unfavourable
• C)$50,000 favourable
• D)$50,000 unfavourable

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Definitions:

Formal presentation

A structured, prepared speech that is given to an audience for the purpose of informing, persuading, or entertaining.

Guessing

Making an assumption or judgement without sufficient information or evidence, often relying on intuition rather than factual verification.

Organization levels

The hierarchy within an organization that starts from the top with strategic management, through to middle management and down to operational levels.

Press releases

Official statements issued to newspapers and other news media for the purpose of providing information, an official statement, or making an announcement.