Bumgardner Inc

question 213

Multiple Choice

Bumgardner Inc. has provided the following data concerning one of the products in its standard cost system.
The company has reported the following actual results for the product for April:

-The labor rate variance is:

• A) $625 U
• B) $500 F
• C) $500 U
• D) $625 F

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Definitions:

Variable Costing

An accounting method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs.

Unit Product Cost

The total cost incurred to produce, market, and distribute a single unit of a product.

Variable Costing

This is an accounting method that only includes variable costs—costs that change with production volume—in the calculation of product cost.

Total Contribution Margin

The difference between total sales revenue and total variable costs, indicating the total earnings available to cover fixed expenses and generate profit.