Jacques Company Planned to Use 18,000 Pounds of Material Costing

question 55

Essay

Jacques Company planned to use 18,000 pounds of material costing $2.50 per pound to make 4,000 units of its product. In actually making 4,000 units, the company used 18,800 pounds that cost $2.54 per pound.
-Calculate the direct materials quantity variance.

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Definitions:

Normal Balance

In accounting, the normal balance is the side (debit or credit) of an account that is usually increased. For example, asset accounts normally have a debit balance, while liabilities and equity accounts have a credit balance.

Direct Write-off Method

A method of accounting for bad debts that involves charging the amount of an uncollectible account directly to the expense account when it is deemed non-recoverable.

Uncollectible Receivables

Debts owed to a company that are considered to be uncollectable and are written off as a loss.

Debit Balance

Occurs when the total of debits in an account exceeds the total of credits, which can be typical for accounts like expenses, assets, and losses.