Custom Tile Works Budgeted 2

question 255

Multiple Choice

Custom Tile Works budgeted 2.5 hours of direct labour per unit at $12.20 per hour to produce 520 hand-painted mosaic tiles. The 520 tiles were completed using 1,400 hours of direct labour at $12.50 per hour. What is the direct labour price variance?

• A) $390 favourable
• B) $420 favourable
• C) $420 unfavourable
• D) $390 unfavourable

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Definitions:

Green Shoe Pricing

A term NO.

Yield Burning

The practice of financial intermediaries marking up the prices on bonds to reduce the yield, often in the context of municipal bond refinancing.

Underpricing

The practice of setting the initial offering price of a security, typically a stock, below its market value.

Public Issue

The offering of shares by a company to the public for the first time to raise capital.