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

question 22

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 materials quantity variance for January is?

• A)$800 U.
• B)$750 F.
• C)$300 F.
• D)$300 U.

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Definitions:

Employees' Input

Feedback or contributions from workers regarding workplace decisions, operations, or changes, aiming to involve staff in the organizational process for better outcomes.

Transaction Processing

Computations and calculations involved in reviewing and documenting HRM decisions and practices.

Government Reporting

The requirement for organizations to submit information to government agencies for regulatory, tax, or compliance purposes.

Compensation

The total amount of financial and non-financial benefits provided to employees for their work contributions.