Reference: 11-04
Cole Laboratories Makes and Sells a Lawn Fertilizer

question 125

Multiple Choice

Reference: 11-04
Cole laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard costs for one bag of Fastgro as follows: $$\begin{array} { | l | l | l | } \hline & \text { Standard Quantity } & \begin{array} { l } \text { Standard Cost per } \\\text { Bag }\end{array} \\\hline \text { Direct material } & 20 \text { grams } & \$ 8.00 \\\hline \text { Direct labour } & 0.1 \text { hours } & \$ 1.10 \\\hline \text { Variable manuf. overhead } & 0.1 \text { hours } & \$ 0.40 \\\hline\end{array}$$ The company had no beginning inventories of any kind on Jan. 1. Variable manufacturing overhead is applied to production on the basis of direct labour hours. During January, the following activity was recorded by the company:
Production of Fastgro: 4,000 bags
Direct materials purchased: 85,000 grams at a cost of $32,300
Direct labour worked: 390 hours at a cost of $4,875
Variable manufacturing overhead incurred: $1,475
Inventory of direct materials on Jan. 31: 3,000 grams
-The labour rate variance for January is?

• A)$475 F.
• B)$585 U.
• C)$585 F.
• D)$475 U.

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Definitions:

Deoxyribose

A five-carbon sugar molecule that is a component of DNA, lacking an oxygen atom compared to ribose.

DNA

Deoxyribonucleic acid, a molecule that carries the genetic instructions used in growth, development, functioning, and reproduction.

Ribosomes

Molecular machines within cells that synthesize proteins by translating the genetic information encoded in mRNA.

Nucleotides

Organic molecules that serve as the building blocks of nucleic acids like DNA and RNA, composed of a sugar, a phosphate group, and a nitrogenous base.