A Company Established a Direct Material Standard of 2 Pounds

question 76

Multiple Choice

A company established a direct material standard of 2 pounds of material at a cost of $6 per pound for unit produced. During August the company produced 6,000 units of product. 10,000 pounds of direct material which cost $6.50 per pound were used in the production process. Compute the direct material price variance for August.

• A) $5,000 unfavorable.
• B) $12,000 unfavorable.
• C) $5,000 favorable.
• D) $12,000 favorable.
• E) $7,000 favorable.

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Definitions:

Collective

Pertaining to a group or assembly of individuals acting as a whole towards a common goal or sharing a common identity.

Emotional

Relates to feelings, moods, and affective states of an individual, often influencing behavior and thought processes.

Structural Cohesion

The strength of relationships and bonds within a group, facilitating its unity and resilience against external pressures.

Tuckman's Stage Model

A theory that outlines five stages of group development: forming, storming, norming, performing, and adjourning.