Whitman Has a Direct Labor Standard of 2 Hours Per

question 38

Multiple Choice

Whitman has a direct labor standard of 2 hours per unit of output.Each employee has a standard wage rate of $22.50 per hour.During July,Whitman paid $94,750 to employees for 4,445 hours worked.2,350 units were produced during July.What is the direct labor efficiency variance?

• A)$11,000.00 favorable
• B)$5,737.50 favorable
• C)$5,262.50 favorable
• D)$5,262.50 unfavorable

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Definitions:

Adjusted Cost of Goods Sold

This refers to the cost of goods sold figure after adjustments for any changes in inventory or other factors affecting the cost of goods produced and sold.

Cost of Goods Manufactured

The total cost incurred by a company to produce goods in a specific period, including labor, material, and overhead.

Adjusted Cost of Goods Sold

The cost of goods sold figure after it has been adjusted for returns, allowances, and any other adjustments.

Unadjusted Cost of Goods Sold

The initial calculation of the cost of goods sold that does not factor in any adjustments like returns or allowances.