TaskMaster Enterprises Employs a Standard Cost System in Which Direct

question 17

Multiple Choice

TaskMaster Enterprises employs a standard cost system in which direct materials inventory is carried at standard cost.TaskMaster has established the following standards for the prime costs of one unit of product. $$\begin{array} { | r r | r | r | } \hline& \text { Standard } & \text { Standard } & \text { Standard } \\&\text { Quantity } & \text { Price } & \text { Cost } \\\hline \text { Direct Materials } & 8 \text { pounds } & \$ 1.80 \text { per pound } & \$ 14.40 \\\hline \text { Direct Labor } & .25 \text { hour } & \$ 8.00 \text { per hour } & 2.00 \\\hline & &&\underline{ \$ 16.40} \\\hline\end{array}$$ During November,TaskMaster purchased 160,000 pounds of direct materials at a total cost of $304,000.The total factory wages for November were $42,000,90% of which were for direct labor.TaskMaster manufactured 19,000 units of product during November using 142,500 pounds of direct materials and 5,000 direct labor hours.What is the direct materials efficiency (quantity) variance for November?

• A) $14,250.
• B) $14,400.
• C) $16,000.
• D) $17,100.

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Definitions:

Arbitraging

The practice of buying a good in one market at a lower price and selling it in another market at a higher price to profit from the price difference.

Price Discriminate

The practice of selling the same product or service at different prices to different customers, based on what the seller believes each customer is willing to pay.

Vertical Relationships

Business arrangements or interactions between companies at different levels of the supply chain, such as manufacturers and retailers.

Vertical Relationships

Vertical relationships refer to the connections between companies or entities at different stages of the production process, such as suppliers, manufacturers, and retailers.