The Following Standards Have Been Established for a Raw Material

question 15

Essay

The following standards have been established for a raw material used to make product I92: The following data pertain to a recent month's operations: The direct materials purchases variance is computed when the materials are purchased.
Required:
a.What is the materials price variance for the month?
b.What is the materials quantity variance for the month?

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Definitions:

Dishonored Note

A promissory note that has not been paid by the maker at maturity, resulting in a default.

Collection Efforts

Activities undertaken by a business or organization to pursue and receive payments owed by customers or clients.

Reversing Entries

Journal entries usually made at the beginning of an accounting period to reverse or cancel out adjusting entries from the end of the previous period.

Allowance Method

An accounting technique used to anticipate and adjust for potential future losses from uncollectible accounts receivable.