The Standard Costs and Actual Costs for Direct Materials for the Manufacture

question 156

Multiple Choice

The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are as follows: The amount of the direct materials quantity variance is:

• A) $875 favorable
• B) $800 unfavorable
• C) $800 favorable
• D) $875 unfavorable

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Definitions:

Expected Rate

The return that investors anticipate or predict receiving over a certain period, often used in the context of interest rates or investment returns.

Risk-free Rate

The return an investor would expect from an absolutely risk-free investment over a specified period.

Expected Market Rate

The anticipated return on investment in the market based on past trends and future forecasts.

Perpetual Cash Flow

Cash flows that are expected to continue forever, often used in valuation methods for investments with no specific end date.