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

question 54

Multiple Choice

Use the information below to answer the following question(s) .
The following data for a pottery company pertain to the production of 2,000 clay pots during July.
Direct Materials (all materials purchased were used) :
Standard cost: $6.00 per kilogram of clay
Total actual cost: $11,200
Standard cost allowed for units produced was $12,000
Materials efficiency variance was $240 unfavourable
Direct Manufacturing Labour:
Standard cost is 2 pots per hour at $24.00 per hour
Actual cost per hour was $24.50
Actual labour was 972 hours
-What is the direct materials rate variance for the clay pots?

• A) $560 unfavourable
• B) $560 favourable
• C) $800 favourable
• D) $1,040 favourable

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