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

question 63

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:

Working Capital

The gap between a business's present assets and liabilities, signifying its short-term financial stability and operational functionality.

Financial Data

Quantitative details about the financial status of a business or individual, including assets, liabilities, revenue, and expenses.

Sales On Account

Transactions in which goods or services are provided to a customer with an agreement to pay at a later date.

Sales On Account

Transactions where goods are sold and payment is deferred, creating an account receivable for the seller.