Bread Company Has Developed the Following Standards for One of Its

question 33

Multiple Choice

Bread Company has developed the following standards for one of its products. The company records materials price variances at the time of purchase.
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The direct labor rate variance is

• A) $8,000 unfavorable.
• B) $8,000 favorable.
• C) $12,000 unfavorable.
• D) $12,000 favorable.

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Definitions:

Direct Labor Variances

The differences between the budgeted and actual costs of direct labor, analyzed to understand deviations in manufacturing expenses.

Variable Overhead Cost

Those expenses of operating a business that vary with the level of output or production activity, such as utilities for manufacturing equipment.

Maintenance Costs

Expenses incurred in the upkeep of machinery, buildings, and equipment to ensure efficient operation and prevent breakdowns.

Machine-Hours

A measurement unit representing the amount of work a machine can perform in one hour, often used in manufacturing to allocate costs based on machine usage.