Use the Information Below to Answer the Following Question(s)

question 49

Multiple Choice

Use the information below to answer the following question(s) .
A company makes table lamps, for which the following standards have been developed:
During January, production of 100 lamps was expected, but 110 lamps were actually completed.
Direct materials purchased and used were 2,100 kilograms at an actual price of $2.20 per kilogram.
Direct labour cost for the month was $5,310, and the actual pay per hour was $9.00.
-For any actual level of output, the difference between the input that was actually used and the input should have been used is

• A) an effectiveness variance.
• B) a purchase cost variance.
• C) the variance rate.
• D) a price variance.
• E) an efficiency variance.

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency.

Book Value Per Share

A financial measure that indicates the value of a company's equity as represented in its shares, calculated by dividing total shareholders' equity by the number of outstanding shares.

Market Price

The current price at which an asset or service can be bought or sold.

Common Share

A type of equity ownership in a corporation, representing a fraction of the total ownership, where each share entitles the holder to a vote at company meetings and a share in the company’s profits.