Shade Company Adopted a Standard Cost System Several Years Ago

question 89

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:

Brittle Bone

Also known as osteogenesis imperfecta, a genetic disorder characterized by bones that break easily due to a collagen defect.

Hydroxyapatite Crystals

Mineral complexes primarily of calcium and phosphate that form the hard structure of bones and teeth.

Compression Strength

The capacity of a material or structure to withstand loads tending to reduce size, measured in force per unit area.

Chondroblasts

Cells that produce cartilage, developing into chondrocytes which are the cells primarily found in cartilage.