Global company makes a product that is expected to use 2.2 pounds of material per unit of product. the material has a standard cost of $2 per pound. global actually used 2.3 pounds of material per unit of product made in january. the actual cost of material was $1.95 per pound. based on this information alone, the materials variances for the january production would be: multiple choice unfavorable for price and unfavorable for usage. favorable for price and unfavorable for usage. favorable for price and favorable for usage.

Favorable for price and unfavorable for usage.

Explanation:

Provided Information,

Standard Material = 2.2 pounds per unit

Standard cost = $2 per pound

Actual Quantity = 2.3 pounds per unit

Actual cost = $1.95 per pound

In Material Price variance we have = (Standard Price - Actual Price) Actual Quantity

Since Standard Price $2 is more than actual price = $1.95 the variance is favorable.

In material quantity variance we have = (Standard Quantity - Actual Quantity) Standard Rate

Since actual quantity used = 2.3 pounds is more than standard 2.2 pounds the variance will be unfavorable

Therefore, Price Variance = Favorable, and Quantity Variance = Unfavorable.

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation: