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Cox Engineering Performs Cement Core Tests in Its Laboratory

question 73

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Cox Engineering performs cement core tests in its laboratory. The following standards have been set for each core test performed: Cox Engineering performs cement core tests in its laboratory. The following standards have been set for each core test performed:   During March, the laboratory performed 2,000 core tests. On March 1 no direct materials (sand)  were on hand. Variable manufacturing overhead is assigned to core tests on the basis of standard direct labor-hours. The following events occurred during March:  • 8,600 pounds of sand were purchased at a cost of $7,310. • 7,200 pounds of sand were used for core tests. • 840 actual direct labor-hours were worked at a cost of $8,610. • Actual variable manufacturing overhead incurred was $3,200. -The materials quantity variance for March is: A) $900 favorable B) $1,950 favorable C) $1,950 unfavorable D) $900 unfavorable During March, the laboratory performed 2,000 core tests. On March 1 no direct materials (sand) were on hand. Variable manufacturing overhead is assigned to core tests on the basis of standard direct labor-hours. The following events occurred during March:

• 8,600 pounds of sand were purchased at a cost of $7,310.
• 7,200 pounds of sand were used for core tests.
• 840 actual direct labor-hours were worked at a cost of $8,610.
• Actual variable manufacturing overhead incurred was $3,200.
-The materials quantity variance for March is:


Definitions:

Flexible Budget

A budget that is adaptable and varies according to the changes in activity level or volume.

Net Operating Income

The profit generated from a company's core business operations, excluding deductions of taxes and interest.

Facility Expenses

Costs associated with the physical locations a business operates, including utilities, maintenance, and rent or mortgage payments.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing for more accurate financial planning.

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