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VladimirAG [237]
3 years ago
5

Relevant information for Material A is as follows:

Business
1 answer:
stiv31 [10]3 years ago
7 0

Answer:

Direct Material Quantity Variance = $2,000 Unfavorable

Explanation:

For the provided information we have,

Actual quantity used = 6,500 lbs

Standard quantity allowed for actual production = 6,000 lbs

Actual price = $3.80

Standard price = $4.00

Direct Material Quantity Variance = (Standard Quantity - Actual Quantity) \times Standard Price

= (6,000 lbs - 6,500 lbs) \times $4.00

= - $2,000

As we can see that actual quantity used is more than the allowed standard quantity, thus, the variance is unfavorable.

Direct Material Quantity Variance = $2,000 Unfavorable

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Answer: Option C is correct

Explanation:

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(a) Cash flow in nature.

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To find whether the cost is incremental cost or not we can find through the following method.

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For this Term:

                                                    Step 1              Step 2             Step 3

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Room and Board                       (9,000)                 -                    (9,000)

Books and Edc. Supplies          (2,500)                 -                    <u>(2,500)</u>

TOTAL COSTS                                                                            <u>(65,500)</u>

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<u>Kindly also review the following question for you better understanding</u>

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