The Following Labor Standards Have Been Established for a Particular

question 160

Multiple Choice

The following labor standards have been established for a particular product:
The following data pertain to operations concerning the product for the last month:

-The labor rate variance for the month was:

• A) $5,750 F
• B) $5,750 U
• C) $1,130 F
• D) $1,130 U

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Definitions:

First-In, First-Out

An inventory valuation method where the costs of the oldest inventory items are assigned to cost of goods sold first, leaving the most recently purchased items in inventory.

Conversion

The process of changing or causing something to change from one form to another, often used in the context of converting raw materials into finished goods.

Department A

A designated section within an organization or factory, often referred to by its functional area or product line, involved in specific operations.

Weighted-Average Method

An inventory costing method that assigns a weighted average cost to each unit of inventory, used to calculate cost of goods sold and ending inventory.