Faas Marine Stores Company Manufactures Decorative Fittings for Luxury Yachts

question 71

Multiple Choice

Faas Marine Stores Company manufactures decorative fittings for luxury yachts which require highly skilled labor, and special metallic materials. Faas uses standard costs to prepare its flexible budget. For the first quarter of 2011, direct material and direct labor standards for one of their popular products were as follows: During the first quarter, Faas produced 5,000 units of this product. At the end of the quarter, an examination of the labor cost records showed that the company used 11,000 hours of direct labor and actual direct labor costs were $184,800. The direct labor price variance was $13,200 F. Which of the following would be a logical explanation for this variance?

• A)The company used fewer labor hours than allowed by standards.
• B)The company paid a lower rate for labor than allowed by standards.
• C)The company used a lower quantity of materials than allowed by standards.
• D)The company paid a lower price for the materials than allowed by standards.

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Any condition, object, or practice that increases the potential for a fire to occur, posing risks to property and personal safety.

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