Aztec Bromac Budgeted the Following Cost Standards for the Current

question 5

Multiple Choice

Aztec Bromac budgeted the following cost standards for the current year: Direct materials = 2.8 kilos per unit @ $3.00 per kilo
Direct labour = 1.5 hours per unit @ $6 per hour
Actual production and costs were as follows:
Units produced = 3,600
Direct materials used = 9,000 kg.
Direct materials purchased = 10,000 kg. @ a cost of $29,000
Direct labour incurred = 4,000 hours at a cost of $26,000
The labour efficiency variance was

• A) $10,000 F
• B) $8,400 U
• C) $8,400 F
• D) $2,000 U

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Definitions:

Supply and Demand

An economic model explaining how the price and quantity of goods and services are determined in a market.

Rent

A periodic payment made for the use of land or a building to the owner by the tenant.

Wages

Payments made to workers for their labor, typically calculated on an hourly, daily, or piecework basis.

Frank Knight

An influential economist known for his work on risk, uncertainty, and the role of entrepreneurship in economic theory.