Tower Company Planned to Produce 3,000 Units of Its Single

question 162

Multiple Choice

Tower Company planned to produce 3,000 units of its single product, Titactium, during November. The standards for one unit of Titactium specify six pounds of materials at $0.30 per pound. Actual production in November was 3,100 units of Titactium. There was an unfavorable materials price variance of $380 and a favorable materials quantity variance of $120. Based on these variances, one could conclude that:

• A)more materials were purchased than were used.
• B)more materials were used than were purchased.
• C)the actual cost per pound for materials was less than the standard cost per pound.
• D)the actual usage of materials was less than the standard alloweD.Materials quantity variance = (AQ - SQ) SP

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Definitions:

Real Estate

Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water.

Truck Driver

An individual professionally licensed to operate trucks and responsible for transporting goods over short or long distances.

Employee

An individual who works under a contract of employment, receiving compensation for providing services to an employer.

Third Party

An individual or group besides the two primarily involved in a situation or contract, often implicated in legal or financial transactions.