Sheldon Company Manufactures Only One Product and Uses a Standard

question 31

Multiple Choice

Sheldon Company manufactures only one product and uses a standard cost system. During the past month, manufacturing operations for the company had the following variances: direct labor rate variance = $30,000 favorable; direct labor efficiency variance = $50,000 unfavorable. Sheldon allows 5 standard direct labor hours per unit produced, and its standard direct labor hourly pay rate is $50. During the month, the company used 25% more direct labor hours than the standard allowed for the output achieved.

What were the total actual direct hours worked (AQ) , rounded to the nearest whole number?

• A) 1,000.
• B) 3,000.
• C) 4,000.
• D) 5,000.
• E) 6,000.

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Definitions:

Population

A group of individuals of the same species living in a particular geographic area, or the total number of individuals belonging to a particular category or groups.

Sample

A subset of a population selected for measurement, observation, or questioning to provide statistical information about the whole.

Biased Sample

A sample that does not accurately represent the population from which it was drawn, usually due to prejudiced selection methods.

Representative Sample

A segment of a population that correctly embodies the traits of the entire population group.