Bryan Company Employs a Standard Cost System in Which Direct

question 49

Multiple Choice

Bryan Company employs a standard cost system in which direct materials inventory is carried at standard cost. Bryan has established the following standards for the prime costs of one unit of product:
$\begin{array} { | l | r | r | r | } \hline & \text { Standard Quantity } & \text { Standard Price } & \text { Standard Cost } \\\hline \text { Direct Materials } & 6 \text { kilograms } & \$ 3.50 / \text { kilogram } & \$ 21.00 \\\hline \text { Direct Labour } & 1.3 \text { hours } & \$ 11.00 / \text { hour } & \$ 14.30 \\\hline & & & \$ 35.30 \\\hline\end{array}$ During March, Bryan purchased 165,000 kilograms of direct materials at a total cost of $585,750. The total factory wages for March were $400,000, 90 percent of which were for direct labour. Bryan manufactured 25,000 units of product during March, using 151,000 kilograms of direct materials and 32,000 direct labour hours.



-What was the direct labour efficiency variance for March?

• A) $5,500 favourable.
• B) $5,500 unfavourable.
• C) $5,625 favourable.
• D) $5,625 unfavourable.

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Definitions:

Observational Studies

Research methods that involve assessing subjects without manipulating the environment or the participants, used to identify and describe natural occurrences.

Statistical Correlation

A measure that indicates the extent to which two or more variables fluctuate together, showing how one variable is linearly related to another.

Correlate

To have a mutual relationship or connection, where one thing affects or depends on another.

Large

Of considerable or relatively great size, extent, capacity, or quantity.