Answer the Following Question(s)using the Information Below

question 73

Multiple Choice

Answer the following question(s) using the information below.Apple Valley Orchards, Inc.(AVO) , developed standard costs for direct material and direct labour.In 2019, AVO estimated the following standard costs for one of their most well loved products, the AVO classic Grandma's large apple pie which had a brown sugar coating on the top of the crust as well as including cranberry and mince ingredients in addition to the apples. During September 2020, AVO produced and sold 1,200 pies using 1,875 kilograms of direct materials at an average cost per kilogram of $7.00 and 280 direct labour hours at an average wage of $14.25 per hour.
-September's direct labour efficiency variance is

• A)$285.00 unfavourable.
• B)$285.00 favourable.
• C)$290.00 unfavourable.
• D)$280.00 unfavourable.
• E)$280.00 favourable.

---

Definitions:

Capitalize

To record a cost as a long-term asset rather than an expense, spreading the cost over its useful life.

Amortize

To amortize means to gradually pay off or write down the cost of an asset or debt over a period, often through regular payments.

Immediate Write-Off

The process of fully expensing an asset or expenditure in the current period instead of spreading its cost over its useful life.

Capitalize

To record an expenditure as an asset on the balance sheet rather than expensing it, in order to spread the cost over its useful life.