Miguez Corporation Makes a Product with the Following Standard Costs

question 349

Multiple Choice

Miguez Corporation makes a product with the following standard costs: The company budgeted for production of 2,600 units in September, but actual production was 2,500 units. The company used 5,440 liters of direct material and 1,680 direct labor-hours to produce this output. The company purchased 5,800 liters of the direct material at $7.20 per liter. The actual direct labor rate was $24.10 per hour and the actual variable overhead rate was $1.90 per hour.The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.The labor efficiency variance for September is:

• A) $1,540 Favorable
• B) $1,687 Unfavorable
• C) $1,687 Favorable
• D) $1,540 Unfavorable

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Definitions:

Barrel of Oil

A unit of measure for crude oil and other petroleum products, equivalent to 42 US gallons.

Environmental Surprise

Unanticipated or unforeseen events or changes in the environment that can drastically impact ecosystems and human societies.

pH

A measure of how acidic or basic a solution is, on a scale of 0 to 14, where 7 is neutral, values less than 7 are acidic, and values greater than 7 are basic.

Solar Radiation

Energy from the sun that is emitted as electromagnetic radiation, which includes both visible light and invisible rays, and is the primary natural source of energy for Earth's climate system.