The Following Data Relate to Product No

question 49

Multiple Choice

The following data relate to product no. 89 of Des Moines Corporation:
Direct material standard: 3 square feet at $2.50 per square foot
Direct material purchased: 30,000 square feet at $2.60 per square foot
Direct material consumed: 29,200 square feet
Manufacturing activity: 9,600 units completed
Assume that the company computes variances at the earliest point in time.
The direct-material price variance is:

• A) $2,880U.
• B) $2,920F.
• C) $2,920U.
• D) $3,000F.
• E) $3,000U.

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Definitions:

Operating Leverage

A measure of how sensitive a company's operating income is to a change in revenues, reflecting the ratio of fixed costs to variable costs.

Advertising Budget

The amount of money allocated towards advertising products or services to enhance sales and market presence.

Selling Price

The amount a seller charges for a product or service, paid by the buyer.

Marketing Manager

A professional responsible for developing strategies to promote a product, service, or brand to increase sales.