A Company Has Established 5 Pounds of Material M at $2

question 86

Multiple Choice

A company has established 5 pounds of Material M at $2 per pound as the standard for the material in its Product A. The company has just produced 1,000 units of this product, using 5,200 pounds of Material M that cost $9,880. The direct materials quantity variance is:

• A) $400 unfavorable.
• B) $120 favorable.
• C) $400 favorable.
• D) $520 favorable.
• E) $520 unfavorable.

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Definitions:

Unintended Consequences

Are outcomes that are not the ones foreseen or intended by a purposeful action, often revealing a discrepancy between the intended result and actual results.

Economic Change

The process through which a country's economy grows, evolves, or transforms due to various factors such as technology, policies, and market conditions.

Incentives

Motivations or rewards designed to encourage specific behaviors or actions, often used in economic, workplace, or educational contexts.

Economic Thinking

A systematic approach to analyzing financial decisions and phenomena, employing principles of economics to evaluate costs, benefits, and impacts.