Ravena Labs $\bullet$ 3,750 Units of Compound Were Produced During the Month

question 240

Multiple Choice

Ravena Labs., Inc. makes a single product which has the following standards: Direct materials: 2.5 ounces at $20 per ounce
Direct labor: 1.4 hours at $12.50 per hour
Variable manufacturing overhead: 1.4 hours at 3.50 per hour
Variable manufacturing overhead is applied on the basis of standard direct labor-hours. The following data are available for October:
$\bullet$ 3,750 units of compound were produced during the month.
$\bullet$ There was no beginning direct materials inventory.
$\bullet$ Direct materials purchased: 12,000 ounces for $225,000.
$\bullet$ The ending direct materials inventory was 2,000 ounces.
$\bullet$ Direct labor-hours worked: 5,600 hours at a cost of $67,200.
$\bullet$ Variable manufacturing overhead costs incurred amounted to $18,200.
$\bullet$ Variable manufacturing overhead applied to products: $18,375.
The labor efficiency variance for October is:

• A) $1,400 Favorable
• B) $1,900 Unfavorable
• C) $3,750 Favorable
• D) $4,375 Unfavorable

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Definitions:

Diversification

The strategy of spreading investments among various financial assets to reduce risk.

Probability Distribution

A mathematical function that outlines every potential value and their probabilities that a random variable might assume across a specified interval.

Statistical Representation

The use of graphical or numerical methods to display and summarize data, making it easier to understand and interpret.

Average Investor's Expected Return

The anticipated amount of profit or loss an investor predicts to make from an investment, based on historical data and future projections.