Allan Company Manufactures Overalls -Refer to the Figure

question 71

Multiple Choice

Allan Company manufactures overalls. During the year, it manufactured 125,000 overalls, using 2.9 hours of direct labour at a rate of $6.25 per hour. The materials and labour standards for manufacturing the overalls are as follows:
Allan required 600,000 m at $1.95 per metre to make the 125,000 overalls.
$\begin{array}{lll}\text {Direct materials ( \( 5 \mathrm{~m} \) of denim \( (012 \) per metre) }&\$10\\\text { Direct labour (3 hours \( @ \$ 6 \) per hour) }&18\\\end{array}$

-Refer to the Figure.What is the entry to close the variances of labour and materials?

• A)Materials Price Variance 30,000Materials Usage Variance 50,000Labour Efficiency Variance 75,000Cost of Goods Sold 155,000Cost of Goods Sold 90,625Labour Rate Variance 90,625
• B)Materials Price Variance 31,250Materials Usage Variance 48,750Labour Efficiency Variance 78,125Cost of Goods Sold 158,125Cost of Goods Sold 93,750Labour Rate Variance 93,750
• C)Cost of Goods Sold 155,000Materials Price Variance 30,000Materials Usage Variance 50,000Labour Efficiency Variance 75,000Labour Rate Variance 90,625Cost of Goods Sold 90,625
• D)Cost of Goods Sold 158,125Materials Price Variance 31,250Materials Usage Variance 48,750Labour Efficiency Variance 78,125Labour Rate Variance 93,750Cost of Goods Sold 93,750

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Definitions:

Receptor Potential

The change in membrane potential by a sensory receptor in response to a stimulus.

Action Potential

This is a temporary reversal of electrical polarization of the membrane in neurons and muscle cells, allowing for the transmission of signals.

Stimulus Transduced

The conversion of a stimulus from the environment into a form that can be processed by the nervous system.

Sensory Adaptation

The process by which sensory receptors diminish their sensitivity to continuous stimuli, allowing organisms to focus on changes in their environment.