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

question 116

Multiple Choice

Melrose Corporation makes a product that uses a material with the following standards: The company budgeted for production of 5, 800 units in September, but actual production was 5, 900 units.The company used 50, 210 pounds of direct material to produce this output.The company purchased 55, 100 pounds of the direct material at $5.80 per pound. The direct materials purchases variance is computed when the materials are purchased.
The materials price variance for September is:

• A)$11, 020 F
• B)$9, 912 U
• C)$9, 912 F
• D)$11, 020 U

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Definitions:

Tax Deductibility

The ability to reduce taxable income through certain expenses or deductions, thus lowering the overall tax liability.

Embedded Debt Cost

The implicit interest cost contained within a leasing agreement, reflecting the leasing company's financing charges.

Cost of Equity

The return that investors expect for investing in a company's equity, representing the compensation for risk.