Majer Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 6.4 ounces $ 3.00 per ounce $ 19.20 Direct labor 0.4 hours $ 13.00 per hour $ 5.20 Variable overhead 0.4 hours $ 5.00 per hour $ 2.00 The company reported the following results concerning this product in February.
Majer Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 6.4 ounces $ 3.00 per ounce $ 19.20 Direct labor 0.4 hours $ 13.00 per hour $ 5.20 Variable overhead 0.4 hours $ 5.00 per hour $ 2.00 The company reported the following results concerning this product in February.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Majer Corporation makes a product with the following
Standard Quantity or Hours | Standard Price or Rate | Standard Cost Per Unit | |||
---|---|---|---|---|---|
Direct materials | 6.4 | ounces | $ 3.00 | per ounce | $ 19.20 |
Direct labor | 0.4 | hours | $ 13.00 | per hour | $ 5.20 |
Variable |
0.4 | hours | $ 5.00 | per hour | $ 2.00 |
The company reported the following results concerning this product in February.
Originally budgeted output | 4,800 | units |
---|---|---|
Actual output | 4,900 | units |
Raw materials used in production | 30,230 | ounces |
Actual direct labor-hours | 1,910 | hours |
Purchases of raw materials | 32,600 | ounces |
Actual price of raw materials | $ 2.90 | per ounce |
Actual direct labor rate | $ 12.40 | per hour |
Actual variable overhead rate | $ 4.90 | 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 labor efficiency variance for February is:
Multiple Choice
A. $650 U
B. $650 F
C. $620 F
D. $620 U
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