Isaman Corporation Uses a Standard Cost System in Which Inventories

question 53

Multiple Choice

Isaman Corporation uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold.The direct labor standards for the company's only product specify 0.60 hours per unit at $21.50 per hour.During the year,the company started and completed 11,500 units.Direct labor employees worked 7,500 hours at an average cost of $19.50 per hour. During the year,the company started and completed 11,500 units.Direct labor employees worked 7,500 hours at an average cost of $19.50 per hour.
Assume that all transactions are recorded on a worksheet as shown in the text.On the left-hand side of the equals sign in the worksheet are columns for Cash,Raw Materials,Work in Process,Finished Goods,and PP&E (net) .All of the variance columns are on the right-hand-side of the equals sign along with the column for Retained Earnings.
When the direct labor cost is recorded,which of the following entries will be made?

• A) ($12,900) in the Labor Rate Variance column
• B) $12,900 in the Labor Efficiency Variance column
• C) $12,900 in the Labor Rate Variance column
• D) ($12,900) in the Labor Efficiency Variance column

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Definitions:

Performance Anxiety

The fear of performing inadequately and a related tension experienced during sex.

Short-term Anxiety

A temporary state of high stress or worry that typically resolves quickly and is often related to specific situations or stimuli.

Approaching Doom

A heightened sense of impending disaster or catastrophic threat, often accompanying anxiety and panic disorders.

Irrational Assumptions

Beliefs that are not based on logic or evidence, often leading to negative effects on mental health.