A Product's Standard Cost Card Specifies That a Unit of the Product

question 246

Multiple Choice

A product's standard cost card specifies that a unit of the product requires 4 direct labor-hours. During September, 3,350 units were made, which was 150 units less than budgeted. The total budgeted direct labor cost for September was $117,600. The direct labor cost incurred during September was $111,850 and 13,450 direct labor-hours were worked. The labor efficiency variance for the month was:

• A) $420.00 U
• B) $420.00 F
• C) $415.80 U
• D) $415.80 F

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Definitions:

Monthly Electricity

The amount of electric energy consumed or billed over a one-month period.

Rent

The price paid for the use of property or land, typically on a periodic basis by tenants to landlords.

Average Total Cost Curve

A graphical representation that shows the average total cost of producing different quantities of a good.

Diminishing Returns

A principle stating that if one factor of production is increased while other factors are held constant, the output per unit of the variable factor will eventually decrease.