Biery Corporation Makes a Product with the Following Standard Costs

question 29

Multiple Choice

Biery Corporation makes a product with the following standard costs:

The company produced 4,100 units in April using 5,380 liters of direct material and 2,610 direct labor-hours. During the month, the company purchased 6,000 liters of the direct material at $5.80 per liter. The actual direct labor rate was $19.80 per hour and the actual variable overhead rate was $2.90 per hour.

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 April is:

• A)$1,066 U
• B)$1,200 U
• C)$1,200 F
• D)$1,066 F

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Definitions:

Functional Discount

A reduction in price given to channel members for performing specific roles or functions beneficial to the discount grantor.

Chain of Distribution

The pathway through which products or services move from the manufacturer or provider to the final consumer, including all intermediaries.

Price Discrimination

The practice of selling the same product or service at different prices to different customers, not based on costs.

Tying Agreement

A sales agreement where the sale of one product (the "tying" product) is conditioned on the purchase of a second, distinct product (the "tied" product).