Kartman Corporation Makes a Product with the Following Standard Costs

question 121

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 rate variance for June is:

• A) $1,890 F
• B) $2,061 U
• C) $2,061 F
• D) $1,890 U

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Definitions:

Price Level

An index of the average prices of goods and services in an economy over a given period of time, indicating the cost of living and inflation.

Price Level

A measure of the average price of goods and services in an economy at a given time, often used to discuss inflation or deflation.

Recession

A notable downturn in economic performance affecting the entire economy and persisting for several months.

Aggregate Demand

The sum of all expenditures on goods and services in an economy, inclusive of private and public spending, investments, and exports minus imports, within a specific timeframe.