Ortman Corporation Makes a Product with the Following Standard Costs

question 158

Multiple Choice

Ortman Corporation makes a product with the following standard costs:

The company reported the following results concerning this product in May.

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
-The materials price variance for May is:

• A)$1,264 F
• B)$1,400 F
• C)$1,264 U
• D)$1,400 U

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Definitions:

Financial Sense

Pertains to the practical and prudent management of money and financial resources to achieve set goals effectively.

Operating Cash Flow

Cash generated from the core business operations of a company, excluding financing and investing activities.

Marginal Revenue

The additional revenue that a company generates by selling one more unit of a product.

Simulation Analysis

A method used in financial planning that assesses the impact of different variables on a model's outcome to predict possible outcomes under different scenarios.