Reference: 11-11
the Clark Company Makes a Single Product and Uses

question 44

Multiple Choice

Reference: 11-11
The Clark Company makes a single product and uses standard costing. Variable overhead is assigned to production on the basis of direct labour hours. Some data concerning this product for the month of May follow: $$\begin{array} { | l | l | l | } \hline \text { Labour rate variance: } & \$ 7,000 & \mathrm {~F} \\\hline \text { Labour efficiency variance: } & \$ 12,000 & \mathrm {~F} \\\hline \text { Variable overhead efficiency variance: } & \$ 4,000 & \mathrm {~F} \\\hline \text { Number of units produced: } & 10,000 & \\\hline \text { Standard labour rate per direct labour hour: } & \$ 12 & \\\hline \text { Standard variable overhead rate per direct labour hour: } & \$ 4 & \\\hline \text { Actual labour hours used: } & 14,000 & \\\hline \text { Actual variable manufacturing overhead costs: } & \$ 58,290 & \\\hline\end{array}$$
-Information on Fleming Company's direct material costs follows: $$\begin{array} { | l | l | l | } \hline \text { Actual amount of direct materials used } & 20,000 & \text { grams } \\\hline \text { Actual direct material costs } & \$ 40,000 & \\\hline \text { Standard price of direct materials } & \$ 1,90 & \text { per gram } \\\hline \text { Direct material quantity variance--favourable } & \$ 5,000 & \\\hline\end{array}$$ What was the company's direct material price variance?

• A)$3,000 favourable.
• B)$2,000 favourable.
• C)$3,000 unfavourable.
• D)$2,000 unfavourable.

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Definitions:

Greater Than Or Equal To

A relational operator that checks if the value on the left side is greater than or equal to the value on the right side.

Evaluates

The process of calculating or determining the value of an expression based on its operands and operations.

Relational Operator

Operators used in programming languages to compare two values, determining their relationship (such as equals, greater than, less than).

==

In many programming languages, "==" is the equality operator that tests if two values are equal.