Majer Corporation makes a product with the following standard costs:

	Standard Quantity or Hours			Standard Price or Rate			Standard Cost Per Unit
Direct materials		2.0	ounces	$	10.00	per ounce	$	20.00
Direct labor		0.8	hours	$	16.00	per hour	$	12.80
Variable overhead		0.8	hours	$	8.50	per hour	$	6.80

The company reported the following results concerning this product in February.

Originally budgeted output		9,600	units
Actual output		9,400	units
Raw materials used in production		14,400	ounces
Actual direct labor-hours		7,720	hours
Purchases of raw materials		16,000	ounces
Actual price of raw materials	$	9.75	per ounce
Actual direct labor rate	$	16.80	per hour
Actual variable overhead rate	$	8.30	per hour

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The materials price variance for February is:

Multiple Choice

A $4,000 F

B $4,000 U

C $47,600 F

D $47,600 U

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PART 2

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow:

• Sales are budgeted at $305,000 for November, $325,000 for December, and $225,000 for January.
• Collections are expected to be 65% in the month of sale and 35% in the month following the sale.
• The cost of goods sold is 80% of sales.
• The company desires to have an ending merchandise inventory at the end of each month equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
• Other monthly expenses to be paid in cash are $22,600.
• Monthly depreciation is $28,500.
• Ignore taxes.

Balance Sheet October 31
Assets
Cash	$	34,000
Accounts receivable		84,500
Merchandise inventory		170,800
Property, plant and equipment, net of $624,000 accumulated depreciation		920,000
Total assets	$	1,209,300
Liabilities and Stockholders' Equity
Accounts payable	$	254,000
Common stock		755,000
Retained earnings		200,300
Total liabilities and stockholders' equity	$	1,209,300

The difference between cash receipts and cash disbursements for December would be:

Multiple Choice

A $6,200

B $13,500

C $25,900

D $40,200