Figure 17-4 Shannon Ltd.'s Standard Cost Card Contained the Following Information

question 79

Multiple Choice

Figure 17-4
Shannon Ltd.'s standard cost card contained the following information:
Direct labour: 1.25 hours * £8.00 per hour = £10.00
Shannon planned to make 12,000 units. Shannon actually made 10,000 units using 13,000 hours.
-Refer to Figure 17-4. If Shannon's actual labour cost was £136,500, Shannon's labour rate variance was

• A)£32,500 unfavourable.
• B)£32,500 favourable.
• C)£6,500 unfavourable.
• D)£6,500 favourable.

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Definitions:

Profit and Loss Statement

A financial statement that summarizes the revenues, costs, and expenses incurred during a specific period, typically a fiscal quarter or year.

CVP Analysis

Cost-Volume-Profit Analysis, a tool used to determine how changes in costs and volume affect a company's profits.

Variable Cost

Expenses that vary directly with the level of production or sales, such as materials or labor.

Target Net Profit

Target net profit is the specific amount of net income that a company aims to achieve within a certain period, guiding pricing, cost management, and sales volume strategies.