Emerald Marine Stores Company Manufactures Special Metallic Materials and Decorative

question 171

Multiple Choice

Emerald Marine Stores Company manufactures special metallic materials and decorative fittings for luxury yachts that require highly skilled labor..Emerald uses standard costs to prepare its flexible budget.For the first quarter of 2015,direct material and direct labor standards for one of their popular products were as follows: Direct materials: 3 pounds per unit; $4 per pound
Direct labor: 4 hours per unit; $15 per hour
Emerald produced 5,000 units during the quarter.At the end of the quarter,an examination of the labor costs records showed that the direct labor cost variance was $75,000 F.Which of the following would be a logical explanation for this variance?

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