Efficient Corporation Uses a Standard Cost System

question 16

Multiple Choice

Efficient Corporation uses a standard cost system.The following information was provided for the period that just ended:

-The direct labor time variance is

• A)$31,725 favorable.
• B)$32,400 favorable.
• C)$89,100 unfavorable.
• D)$121,500 unfavorable.

Calculate total department costs after service department costs allocations using the direct method.

Apply cost allocation principles based on different allocation bases such as square footage, employee numbers, personnel costs, and labor hours.

Evaluate the impact of cost allocation decisions on departmental budgets.

Identify the allocation sequence in the step-down method.

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Definitions:

Procedural Justice

The fairness and transparency of the processes used by authorities to make decisions, often judged based on consistency, bias suppression, accuracy, correctability, and representativeness.

Multiplicative Relationship

A situation or equation in which one variable increases as a result of increasing another variable by a specific factor or multiplier.

Performance

Relates to the execution and outcome of tasks or actions and is often measured against established standards or objectives.

Ability

The possession of the means or skill to do something.