Use the following to answer questions
Hurricane, Inc. manufactures hurricane lamps. Selected data regarding standard costs follow:
Selected actual results for the month of August are shown below:

-The direct materials inventory variance is:
A)$ 750U
B)$ 780F
C)$3,000U
D)$3,750F

Question

Use the following to answer questions
Hurricane, Inc. manufactures hurricane lamps. Selected data regarding standard costs follow:
  Selected actual results for the month of August are shown below:
 
-The direct materials inventory variance is:
A)$ 750U 
B)$ 780F 
C)$3,000U 
D)$3,750F

Quizplus · Accepted Answer

The direct materials inventory variance is calculated as the difference between the actual cost of materials and the standard cost. The choice $3,000U indicates an unfavorable variance, meaning the actual cost exceeded the standard cost by $3,000.

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