Mason, Inc

question 33

Multiple Choice

Mason, Inc. uses a standard costing system. Overhead costs are allocated based on direct labour hours. The standard variable overhead and fixed overhead rates are $1 and $5 per direct labour hour, respectively. Data relevant for the current period include: The direct materials efficiency variance is:

• A) $60,000 Favourable
• B) $60,000 Unfavourable
• C) $65,000 Favourable
• D) $65,000 Unfavourable

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Definitions:

Retained Earnings

Accumulated net incomes of a company not paid out as dividends but retained for reinvestment in the business or to pay off debts.

Shareholders' Equity

This represents owners' claims after all liabilities have been deducted from the total assets of a company.

Total Liabilities

The sum of all financial obligations a company owes to outside parties.

Dividends Declared

An announcement by a company's board of directors of a dividend payment to shareholders, indicating the amount and payment date.