Ally Mfg Uses a Standard Cost System and Its July Production

question 90

Multiple Choice

Ally Mfg. uses a standard cost system and its July production of 1,800 units involved actual direct labor costs of $242,000 for 5,500 hours worked (AQ) . The budget for July called for production of 2,000 units with 6,000 direct labor hours at $40.00 per hour (SP) .

Ally's direct labor rate variance for July, to the nearest dollar, was:

• A) $2,000 unfavorable.
• B) $4,000 unfavorable.
• C) $20,000 favorable.
• D) $22,000 unfavorable.
• E) $26,000 unfavorable.

---

Definitions:

Inverse Demand Function

A mathematical function that expresses the price of a good or service as a function of the quantity demanded, showing how price varies with demand levels.

Tax Imposed

A financial charge or other levy placed upon an individual or a legal entity by a governmental organization in order to fund various public expenditures.

Grapefruit

A large, tart citrus fruit with a segmented interior, often eaten for breakfast or used in culinary dishes.

Civic Authorities

Organizations or governing bodies within a municipality responsible for enforcing laws and regulations and providing public services.