Kartman Corporation Makes a Product with the Following Standard Costs

question 40

Multiple Choice

Kartman Corporation makes a product with the following standard costs: In June the company's budgeted production was 3,400 units but the actual production was 3,500 units. The company used 22,150 pounds of the direct material and 2,290 direct labor-hours to produce this output. During the month, the company purchased 25,400 pounds of the direct material at a cost of $170,180. The actual direct labor cost was $57,021 and the actual variable overhead cost was $8,931.
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The labor efficiency variance for June is:

• A) $4,560 F
• B) $4,560 U
• C) $4,731 U
• D) $4,731 F

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Definitions:

Norms

The unwritten rules or standards of behavior considered acceptable within a society or social group.

Consumerism

The social and economic order that encourages the acquisition of goods and services in ever-increasing amounts.

Adapt Environment

The process by which individuals or groups adjust to changes in their surrounding environmental conditions to improve compatibility and comfort.

Create Culture

The process of cultivating shared values, beliefs, norms, and practices that define a group or organization.