A Company Uses the Following Standard Costs to Produce a Single

question 164

Multiple Choice

A company uses the following standard costs to produce a single unit of output. $$\begin{array} { l l l } \text { Direct materials } & 6 \text { pounds at } \$ 0.90 \text { per pound } & = \$ 5.40 \\\text { Direct labor } & 0.5 \text { hour at } \$ 12.00 \text { per hour } & = \$ 6.00 \\\text { Manufactuning overhead } & 0.5 \text { hour at } \$ 4.80 \text { per hour } & = \$ 2.40\end{array}$$ During the latest month, the company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output. Direct labor costs for the month totaled
$56,350 based on 4,900 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was $10,400.
-Based on this information, the total direct materials cost variance for the month was:

• A) $5,800 unfavorable
• B) $4,000 favorable
• C) $1,800 favorable
• D) $4,000 unfavorable
• E) $5,800 favorable

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Definitions:

Merchant Offeror

A seller or provider of goods and services who presents an offer in a commercial transaction, especially one with expertise or professional standing in the transaction's subject matter.

Firm Offer

an offer in contract law that remains valid for a certain period of time and cannot be withdrawn during that period by the offeror.

Written Offer

A formal proposal presented in written form, detailing the terms under which the offeror is willing to engage in a transaction or agreement.

Complete

Fully executed or finished with all necessary components or steps fulfilled.