Majer Corporation Makes a Product with the Following Standard Costs

question 141

Multiple Choice

Majer Corporation makes a product with the following standard costs:
The company reported the following results concerning this product in February.
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 February is:

• A) $1,146 U
• B) $1,176 U
• C) $1,176 F
• D) $1,146 F

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Definitions:

Operating Activities

The day-to-day actions that a business undertakes to generate revenue, as reflected in the cash flow statement.

Statement of Cash Flows

A financial report that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.

Indirect Method

A way of calculating cash flows for operating activities in the cash flow statement by adjusting net income for changes in non-cash items.

Operating Activities

Operating activities involve the day-to-day functions of a business directly related to its provision of goods and services.