Arrow Industries Uses a Standard Cost System in Which Direct

question 100

Multiple Choice

Arrow Industries uses a standard cost system in which direct materials inventory is carried at standard cost. Arrow has established the following standards for the prime costs of one unit of product. During May, Arrow purchased 160,000 pounds of direct material at a total cost of $304,000. The total direct labor wages for May were $37,800. Arrow manufactured 19,000 units of product during May using 142,500 pounds of direct material and 5,000 direct labor-hours.
-The direct materials price variance for May is:

• A)$16,000 favorable
• B)$16,000 unfavorable
• C)$14,250 favorable
• D)$14,250 unfavorable

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Definitions:

Conventional

Based on or in accordance with what is generally done or believed; traditional, not unusual or experimental.

Idea Box

A conceptual or physical repository for collecting suggestions, creative solutions, or innovative ideas, often used in organizational or team settings.

Combinations

The act of combining or joining two or more elements to form a new whole.

Organizational Effectiveness

The measure of an organization's efficiency in achieving its goals and objectives through the optimal use of resources, processes, and people.