Cryolite Uses a Standard Costing System to Gauge Results for Their

question 60

Multiple Choice

Cryolite uses a standard costing system to gauge results for their single product. 70,000 kilograms of direct materials were purchased for $385,000. Two kilograms of direct materials are needed to produce one unit of product. In March, the company produced 12,000 units. The standard cost allowed for direct material was $120,000, and there was an unfavourable direct materials efficiency variance of $2,500. (CMA) The direct materials price variance for March is:

• A)$25,000 favourable
• B)$25,000 unfavourable
• C)$35,000 favourable
• D)$35,000 unfavourable

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Definitions:

Bargaining Process

The series of negotiations and compromises between two or more parties seeking to make a mutually acceptable agreement.

Breach of Warranty

Failure to fulfill the terms of a promise, claim, or representation made about the quality or type of a product.

Repair or Replace

This refers to the decision or policy regarding whether to fix a damaged or malfunctioning item or to substitute it with a new one.

Merchant Seller

A person or company engaged in the selling of goods, especially on a large scale and dealing with customers who are themselves involved in trade.