Genent Industries, Inc

question 111

Multiple Choice

Genent Industries, Inc. (GII) , developed standard costs for direct material and direct labor. In 2017, GII estimated the following standard costs for one of their major products, the 30-gallon heavy-duty plastic container.

During July, GII produced and sold 4,000 containers using 1,350 pounds of direct materials at an average cost per pound of $48 and 2,450 direct manufacturing labor hours at an average wage of $12.25 per hour.
July's direct material flexible-budget variance is ________.

• A) $4,800 unfavorable
• B) $7,500 favorable
• C) $9,900 unfavorable
• D) $0

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Definitions:

Material

Physical substances or components used in the production of goods or in the construction of projects.

Informative

Characterized by providing useful or interesting information.

Sole Proprietorship

A business structure in which one individual owns and operates the business, responsible for all its debts and liabilities.

State Tax Registration

The process by which a business or individual registers with a state authority to collect, report, and remit taxes as required by law.