Miguez Corporation Makes a Product with the Following Standard Costs

question 60

Multiple Choice

Miguez Corporation makes a product with the following standard costs:
The company budgeted for production of 2,600 units in September, but actual production was 2,500 units. The company used 5,440 liters of direct material and 1,680 direct labor-hours to produce this output. The company purchased 5,800 liters of the direct material at $7.20 per liter. The actual direct labor rate was $24.10 per hour and the actual variable overhead rate was $1.90 per hour.
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 efficiency variance for September is:

• A) $1,540 F
• B) $1,687 U
• C) $1,687 F
• D) $1,540 U

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Definitions:

Product Type

Categories into which goods or services are grouped based on similar characteristics, functions, or intended uses by consumers.

Market Definition

The process of outlining the boundaries of a market including its scope, products, and services, to understand the competitive landscape.

Premises

Statements or observations on which an argument, theory, or study is based.

Demand-Side Perspective

A viewpoint that emphasizes understanding and meeting the needs and preferences of customers rather than focusing exclusively on the supply side, such as production capabilities.