Machine Builders Inc

question 98

Multiple Choice

Machine Builders Inc. adopted a standard cost system several years ago that it uses in conjunction with its process cost system. The per-unit standard costs for direct materials and direct labor for its single product are as follows:The direct labor efficiency variance for July, to the nearest dollar, was:

• A) $6,600 favorable.
• B) $7,200 unfavorable.
• C) $8,000 unfavorable.
• D) $14,400 favorable.
• E) $79,200 favorable.

---

Definitions:

Comparative Advantage

An economic theory stating that an entity is able to produce goods or services at a lower opportunity cost than others, leading to more efficient trading possibilities.

Producing Firewood

The process of cutting, splitting, drying, and preparing wood to be used as fuel for heating or cooking.

Producing Wool

The process of growing, harvesting, and processing wool fibers from sheep or other animals for use in textile production.

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen.