4. Which of the following individuals is least likely to become involved in the

Question

4. Which of the following individuals is least likely to become involved in the setting of direct labor efficiency standards? a. The purchasing manager. b. A production supervisor. c. A design engineer. d. A machine operator. e. A quality control analyst. 5. The definition below that best characterizes unit standard cost is: a. The actual cost of a unit of production or service. b. The cost budget for the production of one unit of a product or service. c. A useful tool in calculating actual cost of goods sold. d. The average cost within an industry. e. The average standard cost from previous years. 6. Cribbage Corporation recently purchased 25,000 gallons of direct material at $5.60 per gallon. Usage by the end of the period amounted to 23,000 gallons. If the standard cost is $6.00 per gallon, the direct-material purchase price variance would be calculated as: a. $800 Favorable b. $9.200 Favorable c. $9.200 Unfavorable d. $10,000 Favorable e. $10,000 Unfavorable

Explanation / Answer

4) The Purchasing Manager

5) The cost budget for production of one unit or service

6) Material Purchase Price Variance = ( Standard Price - Actual Price ) * Quantity Purchased

= ( 6-5.60)*25000 i.e 10000 favourable

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