Shade Company Adopted a Standard Cost System Several Years Ago

question 65

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 labor rate variance for December, to the nearest dollar, was:

• A) $1,590 favorable.
• B) $5,650 favorable.
• C) $7,790 unfavorable.
• D) $24,410 unfavorable.
• E) $59,410 unfavorable.

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