Answer the Following Questions Using the Information Below

question 28

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 material price variance is:

• A)$468.75 favorable
• B)$468.75 unfavorable
• C)$75.00 unfavorable
• D)None of these answers are correct.

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Definitions:

Minimum Wage Law

Legislation that sets the lowest hourly rate that can be paid to workers, aimed at ensuring a minimum standard of living for employees.

Demand Schedule

A diagram indicating the volume of a good or service buyers intend and can afford to buy across a range of prices.

Demand Increased

A situation where consumers are willing and able to purchase more of a good or service at any given price level, often leading to higher prices.

Demand Decreased

A situation where the desire or need for a certain product or service declines, leading to a decrease in its quantity demanded at a given price.