Johnny Corporation Makes a Product That Uses a Material with the Following

question 58

Multiple Choice

Johnny Corporation makes a product that uses a material with the following standards:

The company budgeted for production of 9,500 units in April, but actual production was 9,600 units. The company used 85,400 kilos of direct material to produce this output. The company purchased 91,900 kilos of the direct material at $1.10 per kilo.

The direct materials purchases variance is computed when the materials are purchased.

-The materials price variance for April is:

• A)$7,872 F
• B)$9,190 U
• C)$9,190 F
• D)$7,872 U

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Definitions:

Indirect Method

A technique used in cash flow statements to adjust net income for changes in non-cash items and working capital to arrive at cash provided by operating activities.

Net Cash Provided

The amount of cash generated by a company's business activities after all operating costs and expenses have been paid.

Accounts Receivable

Unsettled payments from customers to a company for goods delivered or services rendered.

Free Cash Flow

The amount of cash generated by a business after accounting for operational expenses and capital expenditures, available for distribution among stakeholders.