Answer the Following Questions Using the Information Below:
Cootamundra Industries

question 20

Multiple Choice

Answer the following questions using the information below:
Cootamundra Industries (CI) ,developed standard costs for direct material and direct labour.In 2018,CI estimated the following standard costs for one of their major products,the 30-litre heavy-duty plastic container.
$$\begin{array} { l l l } & \text { Budgeted quantity } & \text { Budgeted price } \\\text { Direct materials } & 0.20 \mathrm {~kg} & \$ 26 \text { per } \mathrm { kg } \\\text { Direct labour } & 0.10 \text { hours } & \$ 14 \text { per hour }\end{array}$$ During July,CI produced and sold 10 000 containers using 2200 kg of direct materials at an average cost per kg of $24 and 1050 direct manufacturing labour hours at an average wage of $14.75 per hour.
-July's direct manufacturing labour efficiency variance is:

• A)$700.00 unfavourable.
• B)$487.50 favourable.
• C)$262.50 favourable.
• D)None of these answers are correct.

---

Definitions:

Normal Profits

The minimum level of profit needed for a company to remain competitive in the market, often considered as the break-even point.

Pure Competition

A market structure characterized by a large number of small firms, homogeneous products, and ease of entry and exit, leading to price taking behavior.

Production Costs

The total expense incurred in manufacturing a product or providing a service, including materials, labor, and overhead costs.

Pure Competition

A market structure characterized by a large number of small firms producing identical products with no barriers to entry or exit.