Thomas Company Uses a Standard Cost System and Recognizes the Materials

question 42

Multiple Choice

Thomas Company uses a standard cost system and recognizes the materials purchase price variance at the time materials are purchased.Information for raw materials for Product RBI for the month of October follows: What is the materials purchase price variance?

• A)$590 favorable
• B)$590 unfavorable
• C)$600 favorable
• D)$600 unfavorable

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Definitions:

Restrictive

Imposing limitations or conditions on use, action, or movement.

Bearer Instrument

A negotiable financial instrument that is payable to the holder or presenter.

HDC

Stands for Holder in Due Course, a term in commercial law referring to an individual who has acquired a negotiable instrument in good faith and for value, therefore, has certain protections.

Promissory Note

A written promise to pay a specified sum of money to a designated person at a specified date or on demand.