The Foamy Company Makes Mugs for Which the Following Standards

question 109

Multiple Choice

The Foamy Company makes mugs for which the following standards have been developed: $$\begin{array} { l l l } & \text { Standard Inputs } & \text { Standard Price } \\& \text { Expected for Each } & \text { Expected per } \\& \text { Unit of Output } & \text { Unit of Output } \\\text { Direct materials } & 5 \text { ounces } & \$ 2 \text { per ounce } \\\text { Direct labor } & 15 \text { hours } & \$ 8 \text { per hour }\end{array}$$ Production of 400 Mugs was expected in June, but 440 mugs were actually completed. Direct materials purchased and used were 2,100 ounces at an actual price of $2.20 per ounce. Direct labor cost for the month was $5,310, and the actual pay per hour was $9.00. _ is the direct- labor usage variance for the month of June.

• A) $560 favorable
• B) $560 unfavorable
• C) $580 unfavorable
• D) $580 favorable

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