Fraize Corporation Makes a Product That Uses a Material with the Quantity

question 137

Multiple Choice

Fraize Corporation makes a product that uses a material with the quantity standard of 9.5 kilos per unit of output and the price standard of $4.00 per kilo. In July the company produced 7,000 units using 68,850 kilos of the direct material. During the month the company purchased 73,600 kilos of the direct material at $3.70 per kilo. The direct materials purchases variance is computed when the materials are purchased.
-The materials price variance for July is:

• A)$22,080 U
• B)$19,950 U
• C)$22,080 F
• D)$19,950 F

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Definitions:

Distribution Network

The interconnected group of storage facilities and transportation systems that move goods from suppliers to consumers.

Objective Function

A mathematical function used in optimization that defines the goal to be achieved, often maximizing or minimizing some quantity.

Optimal Solution

The best possible outcome or answer found for a given problem, often characterized by the most efficient allocation of resources to achieve desired objectives.

Northwest-Corner Rule

A method used in transportation problems of operations research to find an initial feasible solution by starting from the top-left (northwest) corner of a matrix.