The Following Materials Standards Have Been Established for a Particular

question 132

Multiple Choice

The following materials standards have been established for a particular product:

The following data pertain to operations concerning the product for the last month:

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


-What is the materials price variance for the month?

• A)$4,060 U
• B)$3,640 F
• C)$3,640 U
• D)$4,060 F

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Definitions:

Cash Commitments

Obligations to pay out cash in the future for contracts or other agreed upon transactions.

Compensating Balance

A minimum bank account balance that a borrower agrees to maintain as a condition for borrowing from a lender.

Minimum Cash Balance

The least amount of cash a company aims to hold in its accounts to meet immediate transaction demands.

Bank Requirement

Specific conditions imposed by a bank on a borrower or account holder, including minimum balances and fees.