The Standard Materials Cost to Produce 1 Unit of Product

question 199

Multiple Choice

The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound.In manufacturing 8,000 units,47,000 pounds of material were used at a cost of $51 per pound.What is the direct materials price variance?

• A)$47,000 unfavorable.
• B)$47,000 favorable.
• C)$50,000 unfavorable.
• D)$50,000 favorable.
• E)$3,000 favorable.

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Definitions:

Probability Distribution

A statistical model that demonstrates all possible values and their likelihoods for a random variable across a certain range.

Market Risk

The potential for investors to experience losses due to factors that affect the overall performance of the financial markets, such as economic downturns or fluctuations in interest rates.

Business Risk

The possibility of loss resulting from the day-to-day operations of a business, which can be influenced by numerous factors including market conditions, production costs, and management decisions.

Risk Aversion

The inclination of investors to avoid risk, preferring safer investments over those with higher potential for gains but also greater risk.