Dandridge Company Established a Direct Materials Standard of 4 Pounds

question 44

Essay

Dandridge Company established a direct materials standard of 4 pounds at $4.50 per pound for one of its products.During April,Dandridge produced 22,000 units of the product,using 86,000 pounds of material.
Required:
Based on this information,
(a)Which variance can you calculate?
(b)What is the dollar amount of the variance?
(c)Is the variance favorable or unfavorable?
(d)Do you consider the variance to be sufficiently material that managers should investigate to discover the cause of the variance?

---

Definitions:

Common Stock

A type of security that signifies ownership in a corporation and represents a claim on part of the company's profits or losses.

Coupon Rate

The interest rate stated on a bond when it's issued which represents the annual interest payment the bondholder will receive.

Selling at Par

Selling at par refers to the condition where a security is sold at its face value, not at a discount or premium.

Call Provision

A clause in a bond's contract that allows the issuer to repurchase and retire the debt before its maturity date, usually at a premium price.