Crichton Company the Following Information Is for Crichton Company's July

question 135

Multiple Choice

Crichton Company The following information is for Crichton Company's July production:
$\begin{array}{ll}\textbf { Standard: }\\\text { Material } & 3.0 \text { feet per unit } @ \$ 4.20 \text { per foot } \\\text { Labor } & 2.5 \text { hours per unit } @ \$ 7.50 \text { per hour }\end{array}$

$\begin{array}{ll}\textbf { Actual: }\\\text { Production } & 2,750 \text { units produced during the month } \\\text { Material } & 8,700 \text { feet used; } 9,000 \text { feet purchased @ } \$ 4.50 \text { per foot } \\\text { Labor } & 7,000 \text { direct labor hours } \$ 7.90 \text { per hour }\end{array}$ (Round all answers to the nearest dollar.)
Refer to Crichton Company.What is the labor efficiency variance?

• A)$1,875 U
• B)$938 U
• C)$1,875 F
• D)$1,125 U

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Definitions:

Equivalent Units

A concept used in cost accounting to express the amount of work done on units of inventory in terms of fully completed units.

Conversion Costs

The combined costs of direct labor and manufacturing overheads, which are incurred to convert raw materials into finished goods.

Work in Process

Work in process (WIP) is inventory that includes goods that are in various stages of the production process, partially completed but not yet ready for sale.

Labeling Department

A specific section within a production or manufacturing process focused on the application of labels to products.