Ritchie Company Ritchie Company Uses a Standard Cost System for Its

question 204

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:

Stock Dividends Distributable

Represents shares of a company's stock that have been declared as dividends but have not yet been distributed to shareholders.

Dividends Declared

Profits announced by a company's board of directors to be distributed among shareholders.

Legal Capital

The minimum amount of equity that a company must maintain to protect creditors, often required by law.

Share Capital

The total amount of money raised by a company through the sale of shares to shareholders; represents the equity funding of the business.