Stench Foods Corporation Uses a Standard Cost System to Collect

question 19

Multiple Choice

Stench Foods Corporation uses a standard cost system to collect costs related to the production of its garlic flavored yogurt. The garlic (materials) standards for each container of yogurt produced are 0.8 ounces of crushed garlic at a standard cost of $2.30 per ounce. During the month of June, Stench purchased 75,000 ounces of crushed garlic at a total cost of $171,000. Stench used 64,000 of these ounces to produce 71,500 containers of yogurt.
The direct materials purchases variance is computed when the materials are purchased.
What is Stench's materials quantity variance for June?

• A)$1,500 Favorable
• B)$15,640 Unfavorable
• C)$17,250 Favorable
• D)$23,800 Favorable

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Definitions:

Labour Laws

The collection of laws and regulations governing employment, work conditions, and workers' rights.

Level of Expertise

The degree of knowledge or skill in a particular area, which varies among individuals and affects their ability to perform tasks or solve problems.

Cost Overruns

Expenses exceeding the initial budget in a project, often resulting in financial challenges or the need for additional funding.

Service Definition

The detailed description of the nature, scope, and quality of a service that is to be provided.