If the Actual Direct Labor Hours Spent Producing a Commodity

question 78

Multiple Choice

If the actual direct labor hours spent producing a commodity differ from the standard hours, the variance is a

• A) time variance
• B) price variance
• C) quantity variance
• D) rate variance

---

Definitions:

Production Process

The sequence of operations or activities involved in the manufacture of a product.

Equivalent Units

A concept in cost accounting used to convert partial work into the equivalent number of completed units, facilitating cost analysis.

Work in Process Inventory

Goods that are in the manufacturing process but are not yet completed, representing a stage between raw materials and finished goods.

Job-Order Costing

An accounting method that tracks costs individually for each job, rather than by process or department, making it suitable for companies producing unique or custom products.