Perez, Inc. recently completed 45,000 units of a product that was expected to consume five pounds of direct material per finished unit. The standard price of the direct material was $5.50 per pound. If the firm purchased and consumed 233,000 pounds in manufacturing (cost = $1,213,900), the direct-material quantity variance would be figured as: Multiple Choice $44,000 U. O $44,000 F. $67,600 U.

Perez, Inc. recently completed 45,000 units of a product that was expected to consume five pounds of direct material per finished unit. The standard price of the direct material was $5.50 per pound. If the firm purchased and consumed 233,000 pounds in manufacturing (cost = $1,213,900), the direct-material quantity variance would be figured as: Multiple Choice $44,000 U. O $44,000 F. $67,600 U.

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

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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Question

TB MC Qu. 10-42 Perez, Inc. recently completed...
Perez, Inc. recently completed 45,000 units of a product that was expected to consume five pounds of direct material
per finished unit. The standard price of the direct material was $5.50 per pound. If the firm purchased and consumed
233,000 pounds in manufacturing (cost = $1,213,900), the direct-material quantity variance would be figured as:
Multiple Choice
$44,000 U.
$44,000 F.
$67,600 U.
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Multiple Choice
$44,000 U.
$44,000 F
$67,600 U.
$67,600 F.
None of the answers is correct.
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