The Standard Costs and Actual Costs for Direct Labor for the Manufacture

question 67

Multiple Choice

The standard costs and actual costs for direct labor for the manufacture of 2,500 actual units of product are as follows: The direct labor rate variance is

• A)$2,960 unfavorable
• B)$4,500 favorable
• C)$2,960 favorable
• D)$4,500 unfavorable

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Definitions:

Poisson Probability

A distribution used to predict the probability of a given number of events happening in a fixed interval of time or space, given a constant mean rate of occurrence.

Defects

Imperfections or faults in a product or process that deviate from desired performance or specification.

Normal Distribution

This denotes a probability distribution with symmetry at the mean, proving that nearer-to-mean data points occur more regularly than those farther away.

Mean

The mean of a collection of numbers, found by dividing their total sum by the quantity of numbers in the set.