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.

---

Definitions:

Hard Copy

A physical version of a document or information, as opposed to a digital version.

Email

A method of exchanging digital messages across networks, primarily using Internet protocols.

Social Media

Online platforms that enable users to create content, share experiences, and interact with others.

Messaging

The sending of electronic messages through a communication network between computers, mobile phones, or other devices.