Kartman Corporation Makes a Product with the Following Standard Costs

question 3

Multiple Choice

Kartman Corporation makes a product with the following standard costs:
In June the company's budgeted production was 3,400 units but the actual production was 3,500 units. The company used 22,150 pounds of the direct material and 2,290 direct labor-hours to produce this output. During the month, the company purchased 25,400 pounds of the direct material at a cost of $170,180. The actual direct labor cost was $57,021 and the actual variable overhead cost was $8,931.
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
-The labor efficiency variance for June is:

• A) $4,560 F
• B) $4,560 U
• C) $4,731 U
• D) $4,731 F

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Definitions:

Municipal Swimming Pool

A public swimming facility maintained by a local government for the use of its residents.

Entrance Fees

Entrance fees are charges that individuals must pay to gain access to a facility, event, or organization.

Price Discrimination

A pricing strategy where identical or similar goods or services are sold at different prices by the same provider in different markets or to different segments of consumers.

Producer Surplus

The difference between what producers are willing to sell a product for and the actual price they receive, representing extra benefit or profit for producers.