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:

Power

The ability or capacity to influence the behavior of others, make decisions, and control resources.

Reluctant

Feeling or showing hesitation or unwillingness to do something.

Advocacy

The act of supporting a cause or proposal; the work of advocating for something.

Conservative

A political and social philosophy promoting traditional values and institutions.