Degregorio Corporation Makes a Product That Uses a Material with the Following

question 129

Multiple Choice

Degregorio Corporation makes a product that uses a material with the following direct material standards: The company produced 5,600 units in November using 21,750 kilos of the material. During the month, the company purchased 24,800 kilos of the direct material at a total cost of $168,640. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for November is:

• A)$3,290 F
• B)$3,196 F
• C)$3,290 U
• D)$3,196 U

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Definitions:

Flexible Budget

A budget that adjusts to changes in the volume of activity, providing a more accurate basis for performance evaluation.

Customers Served

Refers to the number of individual customers or client accounts a business has successfully provided its products or services to within a specific period.

Activity Level

A measurement of the volume of activity or production within a company, often influencing costs and operational efficiency.

Activity Variances

The differences between the expected costs of activities and the actual costs, used in managerial accounting to analyze performance.