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

question 102

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 price variance is:

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

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Definitions:

Lag Strategy

A business approach where a company chooses to delay action or innovation, often to observe competitors' performance or reduce risk.

Compensation Philosophies

The underlying beliefs and principles that guide how an organization values and rewards its employees' contributions and efforts.

Pay Secrecy

Policies or practices that restrict or prevent employees from sharing information about their salaries or wages with each other.

Distrust

A feeling of doubt about some person or thing's honesty, reliability, or capability.