Europa Company Manufactures Only One Product The Direct Labor Flexible-Budget Variance for November, to the Nearest

question 149

Multiple Choice

Europa Company manufactures only one product. Presented below is direct labor information for November. $\begin{array}{lr}\text { Standard direct labor hours per unit of product } & 3.20 \\\text { Number of finished units produced } & 6,500 \\\text { Standard wage rate per direct labor hour (SP) } & \$ 19.20 \\\text { Total direct labor pavroll for the period } & \$ 359.424\\\text { Actual wage rate per direct labor hour worked (AP) }&\$16.00\end{array}$ The direct labor flexible-budget variance for November, to the nearest dollar, was:

• A) $26,624 unfavorable.
• B) $31,949 unfavorable.
• C) $39,936 favorable.
• D) $71,885 favorable.
• E) $103,834 favorable.

---

Definitions:

Marginal Revenue Product

The extra income produced by using an additional unit of a resource or input in the production process.

Wage Rate

The fixed amount of compensation or payment a worker receives from an employer in exchange for labor, typically measured per hour or piece of work done.

Diminishing Marginal Product

The decrease in the output of an additional unit of input when all other inputs are held constant beyond a certain point.

Marginal Product

The additional output gained from employing one more unit of a certain input, keeping all other inputs constant.