Mystic Falls Inc.
Mystic Falls Inc. bottles and sells a popular soft drink. In 2009, the company had expected to sell 1 000 000 bottles but actually bottled and sold 900 000 bottles. The standard direct materials cost for each bottle is $.40 comprised of 10 grams at a cost of $.04 per gram. During 2009, 10 000 000 grams of material were purchased out of which 9 200 000 grams were used at a cost of $.05 per gram.
-The direct materials price variance for 2009 was:
A) $ 92 000 U
B) $ 92 000 F
C) $100 000 U
D) $100 000 F

Question

Quizplus · Accepted Answer

The direct materials price variance is calculated as (actual price - standard price) x actual quantity purchased. Since the question does not provide the actual and standard prices or the actual quantity purchased, we cannot calculate the variance directly. However, since the answer choices all refer to variances as either favorable (F) or unfavorable (U), we can eliminate choices A and B because they have opposite signs. That leaves us with choices C and D. Since the letter "U" stands for unfavorable, we can infer that choice C (which has a variance of $100 000 U) is the correct answer.

Mystic Falls Inc. Mystic Falls Inc. Bottles and Sells a Popular Soft Drink