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

---

Definitions:

Fully Depreciated

An asset's state when it has amortized or written off its entire initial cost over its useful life, leaving it with a book value of zero or minimal value.

Asset

An asset is a resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide future benefit.

Life Estimate

A projection or approximation of the duration or longevity of an entity, product, or component.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity.