The Following Data Relate to Direct Labor Costs for the Current

question 23

Multiple Choice

The following data relate to direct labor costs for the current period of Executive Inc.: $$\begin{array} { l l } \text { Standard costs } & 6,000 \text { hours at } \$ 12.00 \\\text { Actual costs } & 7,500 \text { hours at } \$ 11.60\end{array}$$ ? What is the direct labor time variance?

• A) $17,400 favorable
• B) $17,400 unfavorable
• C) $18,000 favorable
• D) $18,000 unfavorable

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Definitions:

Option Premium

An option premium is the price that a buyer pays to the seller for an options contract, which gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified strike price.

Conversion Price

The predetermined price at which convertible securities can be exchanged for common stock.

Convertible Bond

A type of bond that can be converted into a predetermined number of the issuing company's shares at certain times during its life, usually at the discretion of the bondholder.

Par Value

The face value of a bond or a stock, as stated by the issuing company.