Shade Company Adopted a Standard Cost System Several Years Ago

question 61

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 efficiency variance for December, to the nearest dollar, was:

• A) $1,590 favorable.
• B) $5,650 favorable.
• C) $7,240 unfavorable.
• D) $59,410 unfavorable.

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Definitions:

Consolidated Balance Sheet

A financial statement that combines the assets, liabilities, and equity of a parent company and its subsidiaries, presenting them as a single entity.

Book Value

The net value of an asset according to its balance sheet account balance, taking into account depreciation or amortization.

Fair Value

The sum obtained from disposing of an asset or incurred when transferring a liability in a structured deal with market participants at the time of assessment.

Noncontrolling Interest

A share in the equity of a subsidiary not owned by the parent company, reflecting minority shareholders' interests.