The Vito Company Makes Tables for Which the Following Standards

question 128

Multiple Choice

The Vito Company makes tables for which the following standards have been developed: $\begin{array}{cc}&\text { Standard Inputs } & \text { Standard Frice } \\&\text { Expected for Each } & \text { Expected per } \\&\text { Unit of Output } & \text { Unit of Output }\\\hline\text { Direct materials } & 10 \text { pounds } & \$ 4 \text { per pound } \\\text { Direct labor } & 3 \text { hours } & \$ 16 \text { per hour }\end{array}$ Production of 200 tables was expected in July, but 220 tables were actually completed. Direct materials purchased and used were 2,000 pounds at an actual price of $4.40 per pound.Direct-labor cost for the month was $10,620, and the actual pay per hour was $18.00._____ is the direct-material quantity variance for July.

• A)$880 unfavorable
• B)$880 favorable
• C)$800 unfavorable
• D)$800 favorable

---

Definitions:

Compounding Periods

The frequency with which interest is added to the principal of a deposit or loan, affecting the total interest earned or paid.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specific rate of return.

Present Value

The present value of a future amount of money or series of cash flows, considering a certain rate of return.

Annuity

A monetary product that ensures a regular payment schedule to its holder, frequently used to secure a livelihood for people in their post-working years.