Norio Manufacturing uses powdered plastics (PPS) to manufacture a high-pressure board used in a digital equipment product,
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Question:
Norio Manufacturing uses powdered plastics (PPS) to manufacture a high-pressure board used in a digital equipment product, Flex 10. Information concerning its operation in June is as follows:
Budgeted units of Flex 10 for June | 7,000 | |||
Budgeted usage of PPS | 63,000 | pounds | ||
Actual number of units of Flex 10 manufactured | 6,000 | |||
PPS purchased | 84,000 | pounds | ||
PPS used | 59,000 | pounds | ||
Total actual cost of PPS used | $ | 392,940 | ||
Direct materials usage variance | $ | 42,000 | unfavorable | |
Assume that Norio does not maintain an inventory of materials, so that the amount of materials used is equal to the amount of materials purchased. The direct materials purchase-price variance (rounded to the nearest dollar) is:
Multiple Choice
$91,867 favorable.
$86,580 favorable.
$117,600 favorable.
$146,160 favorable.
$105,580 favorable.
Related Book For
Accounting Information Systems basic concepts and current issues
ISBN: 978-0078025334
3rd edition
Authors: Robert Hurt
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