Answer the Following Questions Using the Information Below

question 82

Multiple Choice

Answer the following questions using the information below:
Apple Valley Orchards, Inc. (AVO) , developed standard costs for direct material and direct labor. In 2011, 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, AVO produced and sold 1,200 pies using 1,875 pounds of direct materials at an average cost per pound of $7.00 and 280 direct labor hours at an average wage of $14.25 per hour.
-September's direct labor price variance is:

• A)$210.00 unfavorable
• B)$210.00 favorable
• C)$70.00 unfavorable
• D)$70.00 favorable

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity available for its day-to-day operations.

Long-term Liabilities

Financial obligations of a business that are due more than one year in the future, such as bonds payable or long-term loans.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year.

Current Liabilities

Financial obligations a company is required to pay within one year, such as accounts payable and short-term loans.