The Following Data Relate to Direct Materials Costs for November

question 86

Multiple Choice

The following data relate to direct materials costs for November: What is the direct materials price variance?

• A) $3,600 favorable
• B) $160 favorable
• C) $3,760 favorable
• D) $3,600 unfavorable

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Definitions:

Financial Leverage

The employment of loaned funds to boost the prospective earnings of an investment.

EBIT

A profitability metric that disregards interest and income tax expenditures, known as Earnings Before Interest and Taxes.

ROE

Return On Equity; a measure of a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.

Debt

An amount of money borrowed by one party from another, often used by companies and governments to finance projects and operations.