Shade Company Adopted a Standard Cost System Several Years Ago

question 117

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 x $12.00 per kilogram) = $60.00/unit.Direct labor (3.5 hours x $20.00 per hour) = $70.00/unit.All materials were issued at the beginning of processing.The operating data shown below were taken from the records for December:
The direct labor flexible-budget variance of the period is:

• A)$1,590 favorable.
• B)$5,650 unfavorable.
• C)$7,040 unfavorable.
• D)$9,830 unfavorable.

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Definitions:

Regret Aversion

A psychological effect where individuals avoid making decisions that could result in action-based regret, affecting investment choices and risk-taking behaviors.

Short-Term Losses

Financial losses realized on the sale or exchange of an asset held for one year or less.

Making a Decision

The cognitive process of selecting a course of action from among multiple alternatives.