Shade Company Adopted a Standard Cost System Several Years Ago

question 55

Multiple Choice

Shade Company adopted a standard cost system several years ago. The standard costs for direct labor and direct materials for its single product are as follows: Materials (5 kilograms × $12.00/kilogram) = $60.00/unit; direct labor (3.5 hours/unit × $20.00/hour) = $70.00/unit. All materials are issued at the beginning of processing. The operating data shown below were taken from the records for December: The direct materials usage variance for December, to the nearest dollar, was:

• A) $1,800 unfavorable.
• B) $1,800 favorable.
• C) $59,400 unfavorable.
• D) $59,400 favorable.

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Definitions:

Interest Rate Differential

The difference in interest rates between two distinct economic or financial instruments.

Exchange Rate

The price of one currency in terms of another, crucial in international finance as it determines how much one currency is worth in another.

Political Risk

The risk of losing money due to changes in a country's political environment or policy.