Casivant Corporation makes a product that uses a material with the following direct material standards: Standard quantity Standard price The company produced 7,300 units in November using 28,710 pounds of the material. During the month, the company purchased 30,800 pounds of the direct material at a total cost of $117,040. The direct materials purchases variance is computed when the materials are purchased. The materials price variance for November is: Multiple Choice $5,548 U $6,160 U $6,160 F 3.8 pounds per unit $4.00 per pound $5,548 F
Casivant Corporation makes a product that uses a material with the following direct material standards: Standard quantity Standard price The company produced 7,300 units in November using 28,710 pounds of the material. During the month, the company purchased 30,800 pounds of the direct material at a total cost of $117,040. The direct materials purchases variance is computed when the materials are purchased. The materials price variance for November is: Multiple Choice $5,548 U $6,160 U $6,160 F 3.8 pounds per unit $4.00 per pound $5,548 F
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Casivant Corporation makes a product that uses a material with the following direct
material standards:
Standard quantity
Standard price
The company produced 7,300 units in November using 28,710 pounds of the material.
During the month, the company purchased 30,800 pounds of the direct material at a
total cost of $117,040. The direct materials purchases variance is computed when the
materials are purchased.
The materials price variance for November is:
Multiple Choice
$5,548 U
$6,160 U
$6,160 F
3.8 pounds per unit
$4.00 per pound
$5,548 F
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