Strongsville Company Produces 2,500 Units

question 127

Multiple Choice

Strongsville Company produces 2,500 units.Each unit was expected to require 2 labor hours at a cost of $10 per hour.Total labor cost was $55,250 for 4,750 hours worked.Direct labor is measured in hours._____ is the direct-labor price variance.

• A)$5,250 favorable
• B)$5,250 unfavorable
• C)$7,750 favorable
• D)$7,750 unfavorable

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Definitions:

Common Stock

A type of security that represents ownership in a corporation, granting the holder a share in the company's profits and losses.

Consolidation Entry

Journal entries made in the consolidation process to adjust and eliminate intercompany transactions between parent and subsidiary entities in consolidated financial statements.

Inventory Transfer

The process of moving goods from one location to another within the same business entity.

Cost of Goods Sold

Immediate expenses incurred in the production of a company’s merchandise, including labor and material costs.