Jackson Industries Uses a Standard Cost System in Which Direct

question 113

Multiple Choice

Jackson Industries uses a standard cost system in which direct materials inventory is carried at standard cost. Jackson has established the following standards for one unit of product. During May, Jackson purchased 125,000 pounds of direct material at a total cost of $475,000. The total factory wages for May were $364,000, 90 percent of which were for direct labor. Jackson manufactured 22,000 units of product during May using 108,000 pounds of direct material and 28,000 direct labor-hours. The price variance for the direct material acquired by Jackson Industries during May is:

• A)$21,600 Favorable
• B)$25,000 Unfavorable
• C)$28,000 Favorable
• D)$21,600 Unfavorable

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Definitions:

Everyday Low

A pricing strategy where a retailer aims to provide products at low prices on a consistent basis instead of relying on sales or discounts.

Pricing Strategy

The approach a business takes to set the prices for its products or services, aiming to balance competitiveness with profitability.

Continuous Minimum Prices

A policy or practice of setting a floor price for goods or services that must always be met or exceeded.

Market Fluctuation Rate

The variation in market prices over a specified period, often influenced by economic factors, supply and demand.