Calculate the Direct Materials Price Variance Using the Above Information

question 6

Multiple Choice

Calculate the Direct Materials Price variance using the above information:

• A) $1,795.50 Favorable
• B) $378.00 Favorable
• C) $4,512.50 Unfavorable
• D) $378.00 Unfavorable

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Definitions:

Required Rate of Return

The minimum return an investor expects to receive on an investment to compensate for its risk.

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment by calculating the difference between the present value of cash inflows and outflows.

Working Capital

The distinction between a corporation's short-term assets and liabilities, showing the available capital for operational purposes.

Fast-Food Chain

A series of restaurants serving food quickly and standardized in method and by the same brand name.