The Following Data Pertains to the Direct Materials Cost for the Month

question 62

Multiple Choice

The following data pertains to the direct materials cost for the month of October: What is the direct materials efficiency (quantity) variance?

• A)$950 favorable
• B)$950 unfavorable
• C)$1,000 favorable
• D)$1,000 unfavorable
• E)$50 unfavorable

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Definitions:

Idle Capacity

Unused production capability in a given period, often resulting in inefficiency and increased costs.

Supervisory Wages

Costs associated with the salaries of supervisory personnel, considered part of manufacturing overhead in production environments.

Activity-based Costing

Activity-based costing is an accounting method that assigns costs to products based on the activities they require.

Overhead Cost

General expenses related to the day-to-day operations of a business that cannot be directly linked to a specific product or service.