# An unfavorable price variance for direct materials

• Homework Help
• 57
• 100% (1) 1 out of 1 people found this document helpful

This preview shows page 26 - 29 out of 57 pages.

##### We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
The document you are viewing contains questions related to this textbook.
Chapter 13 / Exercise E13-23
Survey of Accounting
Warren
Expert Verified
109) An unfavorable price variance for direct materials might indicate: A) that the purchasing manager purchased in smaller quantities due to a change to just-in-time inventory methods B) congestion due to scheduling problems C) that the purchasing manager skillfully negotiated a better purchase price D) that the market had an unexpected oversupply of those materials Answer:
A Diff: 3 Terms: price variance Objective: 4 AACSB: Reflective thinking
##### We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
The document you are viewing contains questions related to this textbook.
Chapter 13 / Exercise E13-23
Survey of Accounting
Warren
Expert Verified
27 110) A favorable efficiency variance for direct materials might indicate:
B Diff: 3 Terms: efficiency variance Objective: 4 AACSB: Analytical skills 111) A favorable price variance for direct manufacturing labor might indicate that:
C Diff: 3 Terms: price variance Objective: 4 AACSB: Analytical skills 112) An unfavorable efficiency variance for direct manufacturing labor might indicate that:
B Diff: 3 Terms: efficiency variance Objective: 4 AACSB: Ethical reasoning
28 Answer the following questions using the information below: Robb Industries, Inc. (RII), developed standard costs for direct material and direct labor. In 2004, RII estimated the following standard costs for one of their major products, the 10-gallon plastic container. Budgeted quantityBudgeted priceDirect materials 0.10 pounds \$30 per pound Direct labor 0.05 hours \$15 per hour During June, RII produced and sold 5,000 containers using 490 pounds of direct materials at an average cost per pound of \$32 and 250 direct manufacturing labor-hours at an average wage of \$15.25 per hour. 113) June's direct material flexible-budget variance is: A) \$980 unfavorable B) \$300 favorable C) \$680 unfavorable D) None of these answers are correct. Answer: Explanation: C) (490 ×\$32) -(5,000 ×0.10 ×\$30) =
C
\$680 U Diff: 2 Terms: flexible-budget variance Objective: 4 AACSB: Analytical skills 114) June's direct material price variance is:
A
Diff: 2 Terms: price variance Objective: 4 AACSB: Analytical skills