The Following Data Relate to Direct Materials Costs of Texas

question 18

Multiple Choice

The following data relate to direct materials costs of Texas Inc. for November: $\begin{array}{lrr} \text { 4,500 pounds at \( \$ 6.00 \) } & \text { Actual costs }\\ \text { 4,600 pounds at \( \$ 5.50 \) } & \text {Standard costs }\\\end{array}$
Refer to the information provided for Texas Inc. What is the direct materials price variance?

• A) $2,250 unfavorable
• B) $2,250 favorable
• C) $2,300 unfavorable
• D) $1,700 unfavorable

Understand the calculation of variable and fixed components of the predetermined overhead rate.

Calculate variable overhead rate variance and efficiency variances.

Calculate fixed overhead budget and volume variances.

Understand the impact of standard machine-hours and labor-hours on overhead application.

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