Zanny Electronics Corporation Uses a Standard Cost System for the Production

question 457

Multiple Choice

Zanny Electronics Corporation uses a standard cost system for the production of its water ski radios. The direct labor standard for each radio is 0.9 hours. The standard direct labor cost per hour is $7.20. During the month of August, Zanny's water ski radio production used 6,600 direct labor-hours at a total direct labor cost of $48,708. This resulted in production of 6,900 water ski radios for August. What is Zanny's labor rate variance for August?

• A) $972 Favorable
• B) $1,188 Unfavorable
• C) $2,160 Favorable
• D) $2,808 Unfavorable

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Definitions:

Metamorphism

The process by which the mineralogical and structural characteristics of rocks are changed by high temperature and pressure within the Earth.

Strike-Slip Fault

A type of fault where two blocks of the Earth's crust slide past each other horizontally along the fault plane.

Transform Boundaries

Plate boundaries where tectonic plates slide horizontally past each other, often leading to earthquakes.

Mid-Ocean Ridge

A series of mountains beneath the ocean, generated by the shifting of tectonic plates, where fresh oceanic crust is formed.