Cabot Company Collected the Following Data Regarding Production of One

question 132

Multiple Choice

Cabot Company collected the following data regarding production of one of its products. Compute the direct materials quantity variance.

• A) $2,430 unfavorable.
• B) $3,570 unfavorable.
• C) $2,430 favorable.
• D) $6,000 unfavorable.
• E) $3,570 favorable.

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Definitions:

Bond Discount

is the difference between the face value of a bond and its selling price when the bond is sold for less than its face value.

Straight Line Amortization

A method for calculating the periodic reduction in the carrying amount of an intangible asset, spreading the cost evenly over its useful life.

Par Value Bonds

Bonds issued with a fixed face value that is to be repaid at maturity, often different from their market value.

Impairment Loss

The amount by which the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, necessitating a write-down to reflect the reduced value.