Cole Laboratories Makes and Sells a Lawn Fertilizer Called Fastgro

question 188

Multiple Choice

Cole Laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard costs for one bag of Fastgro as follows:
$\begin{array}{|l|r|r|}\hline & \text { Standard Quantity } & \text { Standard Cost per Bag } \\\hline \text { Direct Materials } & 20 \text { kilograms } & \$ 8.00 \\\hline \text { Direct Labour } & 0.1 \text { hours } & 1.10 \\\hline \text { Variable Manufacturing Overhead } & 0.1 \text { hours } & .40\\\hline \end{array}$
The company had no beginning inventories of any kind on January 1. Variable manufacturing overhead is applied to production on the basis of direct labour hours. The results of the company's operations during January are as follows:
$\begin{array}{|l|r|}\hline \text { Production of Fastgro: } & 4,000 \text { bags } \\\hline \text { Direct Materials Purchased } & 85,000 \text { kilograms at a cost of } \$ 32,300 \\\hline \text { Direct Labour Used } & 390 \text { hours at a cost of } \$ 4,875 \\\hline \text { Variable Manufacturing Overhead Incurred } & \$ 1,475 \\\hline \text { Inventory of Direct Materials on January } 31 & 3,000 \text { kilograms } \\\hline\end{array}$
-What was the materials quantity variance for January?

• A) $300 favourable.
• B) $300 unfavourable.
• C) $750 favourable.
• D) $800 unfavourable.

---

Definitions:

Medium Richness

pertains to the ability of a communication medium to convey messages effectively, balancing immediacy, feedback, and personalization.

Personalized Feedback

Customized responses or evaluations based on an individual's performance or behavior.

Variety of Cues

A range of signals or indicators used in communication or decision-making processes.

Media Richness

The capacity of a communication medium to successfully transfer information and foster comprehension.