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		6,600
Budgeted usage of PPS		59,400	pounds
Actual number of units of Flex 10 manufactured		5,600
PPS purchased		76,360	pounds
PPS used		55,000	pounds
Total actual cost of PPS used	$	344,300
Direct materials usage variance	$	38,180	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

• $76,372 favorable.

• $85,577 favorable.

• $155,774 favorable.

• $94,172 favorable.

• $109,560 favorable.

Answer 1

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