Blue Box Beach Chairs Has the Following Standards to Make

question 58

Multiple Choice

Blue Box Beach Chairs has the following standards to make beach chairs: $$\begin{array} { l c c } & \text { Standard Quantity } & \text { Standard Price } \\\text { Direct materials } & 2.2 \text { pounds of polywood per chair } & \$ 3.50 \text { per pound } \\\text { Direct labor } & 0.65 \text { hours per chair } & \$ 13.00 \text { per hour }\end{array}$$ The static budget was based on the production of 6,200 beach chairs.The company used 13,000 pounds of polywood in order to make 6,000 chairs in April.The company purchased 7,000 pounds of polywood at a total cost of $24,150.It also used 3,840 labor hours at a cost of $12.70 per hour.How much is the direct labor rate variance?

• A)$1,932 unfavorable
• B)$1,152 favorable
• C)$780 favorable
• D)$2,470 favorable

Understand how errors in merchandise inventory impact financial statements.

Identify the classification of various transactions and balances within financial accounting (assets, liabilities, revenue, expenses).

Define and categorize different types of expenses in accounting.

Understand the concept and calculation of gross profit.

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Definitions:

Accrued Interest

Interest that has been earned but not yet received in cash or recorded as an asset on the balance sheet.

Note Receivable

A financial asset representing a written promise to receive a specific amount of money on a certain date or on demand.

Payment of Account

The process of settling a liability or an amount owed to a creditor, vendor, or supplier by making a cash or electronic payment.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects revenue from its credit sales, calculated as sales divided by average accounts receivable.