Ritchie Company Ritchie Company Uses a Standard Cost System for Its

question 21

Multiple Choice

Ritchie Company Ritchie Company uses a standard cost system for its production process.Ritchie Company applies overhead based on direct labor hours.The following information is available for July:
Refer to Ritchie Company Using the three-variance approach,what is the efficiency variance?

• A)$11,770 F
• B)$2,200 F
• C)$7,975 U
• D)$5,775 U

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Definitions:

Retained Earnings Account

An equity account that represents the accumulated profits of a company that have not been distributed to shareholders as dividends.

Income Statement Account

An income statement account is a financial account that reflects income, expenses, gains, and losses over a period, used to calculate net income.

Stock Dividend

A distribution of additional shares of a company to its shareholders instead of paying cash dividends, often used to conserve cash while still rewarding investors.

Par Value

The nominal or face value of a bond, stock, or coupon as stated by the issuer, which often bears no relation to its market value.